The bank has released a statement to the ASX in which it states it is "assessing the appropriate structure for its New Zealand business and whether a demerger would be in the best interests of shareholders".
"Westpac is in the very early stage of this assessment and no decisions have been made," the Aussie banking group said.
Reports in Australia suggest Westpac has hired Macquarie to conduct a strategic review, in which a spin-off IPO and outright sale will be assessed.
Westpac said the RBNZ's new capital rules, which will require the big four to hold more tier one capital from July, is a major factor in its decision.
It said "Given the changing capital structure requirements in New Zealand and the RBNZ's requirements to structurally separate Westpac's NZ business operations from its operations in Australia, it is now appropriate to assess the best structure for these businesses going forward."
