Bank of Hawaii begins asset sale

Bank of Hawaii is selling off assets in Australia and the South Pacific

SYDNEY, Australia (CNN) -- The Bank of Hawaii has begun cutting its Asia-Pacific assets with the sale of a 10 percent stake in the Australian regional bank, Bank of Queensland.

Bank of Hawaii's parent, U.S.-based Pacific Century Financial Corp, is restructuring and is likely to sell various assets in the region by the end of the year.

These include Bank of Hawaii branches in the South Pacific and East Asia, although its Japan operation will continue.

The Commonwealth Bank of Australia, which already holds a 13 percent stake in the Bank of Queensland, was seen by some analysts as a potential buyer of a bigger share.

But the BOH's 10 percent stake was bought by Australian transport magnate Lindsay Fox for about $20 million.

Long term strategic holding in bank

Bank of Queensland managing director David Liddy said Thursday he spoke to Fox's son Peter Fox that morning and was "delighted to learn that the Fox Group were keen to have a long term strategic shareholding in the bank."

The expectation is that the Fox family, which has built a substantial business in transport and logistics, will seek a seat on the BOQ board.

Liddy said the issue of a seat on the board would have to be put to the whole BOQ board and he was therefore unable to comment.

The Bank of Queensland issued a statement to the Australian Stock Exchange on Tuesday saying that the Bank of Hawaii supported its desire to remain a fully autonomous and independent regional bank

The BOQ also said it had offered to buy convertible notes with a face value of $15.5 million (A$31 million) back from the Bank of Hawaii. This accounts for about a further 7 percent of the BOQ, which has a market capitalization of about $200 million.

The Bank of Hawaii's restructure will have a substantial impact in the small economies of the South Pacific. It plans to sell branches in Fiji, Vanuata, Papua New Guinea, New Caledonia and French Polynesia. In the 1990s it made an aggressive expansion into the South Pacific, but the region failed to deliver the expected profits.

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