Westpac has abandoned its previously announced plans of a prospective demerger of its business in New Zealand.

The Australian lender has now announced that it will continue to retain 100% ownership of Westpac New Zealand Limited (WNZL).

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In March, Westpac initiated a review process to assess a possible divestment of its operations in New Zealand. The move was taken after the central bank of the country raised concerns about its risk governance processes.

Westpac Group CEO Peter King said: “After a detailed review, we believe a demerger of the WNZL business would not be in the best interests of shareholders.

“Our review identified opportunities to improve service for customers and value across the WNZL business and we will progress these with the WNZL Board and management team.

“WNZL is a strong business that has been serving New Zealand for 160 years. We remain committed to delivering for customers and fulfilling our purpose of helping Australians and New Zealanders succeed.”

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Currently, the bank is working to finalise the successor of WNZL CEO David McLean, who is set to retire this week. Simon Power, general manager of Institutional and Business Banking, will serve as interim CEO until the board appoints McLean’s replacement.

Earlier this month, Westpac launched its first digital loyalty suite in partnership with fintech Ascenda.

The move is expected to boost customer engagement.