Posted at 12:05 p.m., Wednesday, April 25, 2001

Bankoh to sell Australia bank holdings

By Frank Cho
Advertiser Staff Writer

Bank of Hawaii said today that it is negotiating to sell most of its holdings in the Bank of Queensland Ltd. to an Australian businessman as part of its divestment strategy.

Lindsay Fox, who runs an Australian trucking business, is reportedly paying $20 million to acquire a 10 percent stake in the Australian bank, according to a spokesman for Fox.

Bank of Hawaii holds 17 percent of the Bank of Queensland.

The announcement comes a day after Bank of Hawaii's parent, Pacific Century Financial Corp., said it would sell nearly all of its Asian and South Pacific operations to focus its business on Ha wai'i.

"We are in discussions with the parties. However, we have nothing more to say at this time," Pacific Century spokesman Stafford Kiguchi said today.

The deal would be subject to state and federal regulatory approval.

Bank of Hawaii holds about 17 percent of the Australian bank — 8 percent of it held in convertible notes.

The Bank of Queensland said yesterday it is seeking to buy back 5.38 million notes worth about $15.7 million from Bank of Hawaii — or all of the Hawai'i bank's 17 percent stake in Bank of Queensland.

The two banks have had a strategic alliance since November 1997, sharing products, services, expertise and facilities.

The Bank of Queensland, which is similar in size and operation to a community bank in the United States, has a reputation as a well-managed bank. It has 95 locations in Northeastern Australia and about $2 billion in assets.

Bank of Hawaii first invested $22 million in the Australian bank in 1998 to boost its growing international portfolio.

It invested another $23 million the following year to increase its stake to 17 percent.

The deal gave the Hawai'i bank its first foothold on the Australian continent, while giving Queensland greater access to international markets.

Commonwealth Bank of Australia, the country's second-largest lender, is Bank of Queensland's second-biggest shareholder, with 13 percent.