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Westpac to appeal NZ structured finance case
Tuesday November 3, 06:48 PM
Westpac has appealed the structured finance transaction High Court case that went against it last month.
The bank, which reports its annual profit tomorrow, has said the cost of the judgment was $918 million.
Justice Rhys Harrison ruled last month that the structured finance transactions were tax avoidance arrangements.
Westpac had now taken the time to review the detail of the decision and considered an appeal justified, Westpac NZ chief executive George Frazis said today.
"In our view there are sound arguments that warrant an appeal of the High Court's decision. We consider those arguments are of sufficient merit to justify consideration by the New Zealand Court of Appeal."
The appeal was likely to be held no earlier than the last quarter of 2010.
BNZ has appealed a judgment against it involving $661m of back taxes and interest, and ANZ and ASB still have High Court cases pending against them.
Moody's Investor Services said last month that the ratings of Australian banks were not affected by the sizeable costs they faced from the tax judgments.
Moody's said the Westpac judgment may be the more significant, given that the bank had obtained a favourable ruling from the Commissioner of Inland Revenue on a similar transaction in 2001.
The net impact on the credit quality of the banks would be fairly limited, Moody's said.
Westpac NZ reported a 15 percent fall in first half net profit to $202 million, as impairment charges rose by $123m to $184m.
Core earnings, before tax and impairment charges, for the six months to the end of March rose 13 percent from a year earlier to $471m.
Source:
- Westpac Banking Corporation (NZX: WBC.nz)
- Contact Energy Limited (NZX: CEN.nz)
- Fisher & Paykel Healthcare Corporation Limited (NZX: FPH.nz)
- Michael Hill International Limited (NZX: MHI.nz)
- Port of Tauranga Limited (NZX: POT.nz)
- Tourism Holdings Limited (NZX: THL.nz)
- Tower Limited (NZX: TWR.nz)
- Fletcher Building Limited (NZX: FBU.nz)
- Infratil Limited (NZX: IFT.nz)
- Westpac Banking Corporation (NZX: WBC.nz)
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