The Commonwealth Bank is considering a non-binding offer by Papua New Guinea’s Bank South Pacific (BSP) to buy its Fijian banking and insurance businesses.

A number of measures by the Fijian military-backed government are making life difficult for the banking industry.

These include a 20% currency devaluation, forced interest rate cuts and a direction to increase lending to small business.

The Commonwealth bought the Fijian Government’s 49% holding in Colonial National Bank in January 2006 for $F28 million ($22 million then and $17 million now) to give it outright ownership.

BSP is the largest retail bank in Papua New Guinea, with more than 2 billion kina ($943 million) in assets.