Don’t bank on it

IT is probably just a furphy, but the speculation about a merger between Wesfarmers and the Bank of Western Australia is intriguing. The most ardent BankWest supporters could not claim that institution has set the world on fire since it was listed in 1996. The share price performance is pedestrian in the extreme. And the belief that the 55 per cent Bank of Scotland holding is for sale is unsettling.

Wesfarmers is getting deeper into financial services with the acquisition of IAMA. Futuris got a full banking licence for its Elders - Bendigo Bank joint venture. Perhaps Mike Chaney of Wesfarmers would like one. Whether he needs a whole bank, and whether the acquisition would meet his famous internal requirements of return on capital, are two other questions.

Just for the record: BankWest is valued on the market at a touch over $2 billion. Muscular Wesfarmers is capitalised at $5.2 billion.