The move announced by ANZ officials here gives Australia near complete control of New Zealands banking industry, owning the top five banks: the ANZ and the National Bank, as well as the Bank of New Zealand, ASB Bank and Westpac.
Melbourne-based ANZ said it would raise $3.6 billion Australian ($2.5 billion) in a rights issue to fund the purchase.
The central reserve bank said it had consented to the purchase on the condition that the ANZ and the National Bank operations retained their separate identities. Any change will require a new approval.
There was market speculation that ANZ would seek to eventually dump its own identity which regularly scores poorly in consumer surveys in New Zealand and trade instead under the National Bank logo which jostles for the top position in customer satisfaction.
ANZ said it would work together with National, to complete a very different acquisition one based on customer satisfaction and growth by retaining the best of both banks.