Sydney, June 1: Australia and New Zealand Banking Group (ANZ) chief executive Don Mercer said on Sunday he thought overseas banks were in the process of looking at Australian banks as takeover prospects. However, he said in a television interview that he doubted a bid was in the offing because of the huge cost involved.

"I'd be surprised if we weren't in the strategic planning files of quite a number of overseas banks," Mercer said. "Oh, we know we are quite attractive to some but what I'd also put on the table is that we're huge institutions - the Australian major trading banks are very large banks and for any overseas bank to determine they want to buy one of us is to make an enormous commitment of capital to Australia," Mercer said.

ANZ, one of Australia's `big four' banks, has a current market capitalisation of A$13.5 billion (US$10.2 billion). The others members of the big four are National Australia Bank Ltd, capitalised at A$27.8 billion, Commonwealth Bank of Australia, capitalised at A$13.1 billion, and Westpac Banking Corp, capitalised at A$12.7 billion.

Mercer said there had been much talk about bank takeover ssince the release of the recent report of the Wallis inquiry into the Financial system. However, the government put a freeze on mergers among the big four and said it would agree to a takeover of one of the banks by a foreign bank if it was in the National interest.

A view I've come to is that there are few players indeed internationally who would have the appetite for an Aussie bank and most of them would actually seek to diversify their opportunities more broadly than to commit so much to this part of the world," Mercer said in an interview on the Nine Network."I can be proved wrong but I think it's an unlikely eventuality," he said. ANZ announced last week that its net profit rose to A$615 million in the six months to March 31, up 18 percent from A$520 million a year earlier. The bank also announced that Mercer would retire at year-end.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.