CML--dated 25/5/2002 HSBC or Westpac

http://www.themercury.news.com.au/common/story_page/0,5936,4383943%5E462,00.html
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Coles draws veil over bank plans
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25may02
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COLES Myer appears close to realising its long-held ambition to join the banking ranks by forging a strategic alliance with either Westpac or HSBC Group.
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The retail group's executives remained tight-lipped yesterday, apart from one spokesman saying: "We have said that financial services is on our strategic horizon."
"Broadly speaking, Coles Myer is always looking at different opportunities in the market place."
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Coles Myer signalled its intentions more than three years ago when it rolled out banking kiosks providing financial services and products.
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Woolworths had an exclusive arrangement with the Commonwealth Bank through Ezy Banking, which drew more than 200,000 new customers to the bank.
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Shaw Stockbroking analyst David McDonald said an alliance with a bank made a lot of sense for Coles Myer.
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"There are a lot of synergies if Coles Myer and Westpac were to align with each other.
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"Coles Myer has had other partners in the past and it looks like they want to consolidate that."
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Already 14 million people pass through Coles Myer stores around the country each week with its 608 Coles/Bi Lo supermarkets and 73 Myer Grace Bros stores.
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A Westpac spokesman declined to comment on the speculation.
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If the deal went ahead, it was believed the financial products offered to the Coles Myer customers would feature the Coles brand.
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The deal would also fit in with Westpac's plans to drive its growth organically in Australia and New Zealand and would give it access to Coles' massive customer base.
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Earlier this month Westpac sealed a $1.65 billion deal to sell its consumer finance arm AGC to GE Capital, which funds and manages Coles' store-card program.
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Westpac also recently bought Rothschild Australia Asset Management for $323 million.
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HSBC was keen to grow organically in Australia and had been reported as a possible acquirer of St George Bank when its 10 per cent shareholder cap expires on July 1, leaving it open to takeover.
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Coles Myer stocks were two cents higher at $6.52 at 1442 AEST, while Westpac was steady at $16.28.
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