The Pak Banker
BoQ buying ME Bank
Bank of Queensland (BoQ) has been in a trading halt since last week when it started raising funds for the speculated deal.
The bank confirmed the 100 per cent purchase of ME Bank and said it would fund this via a $1.35 billion equity raising.
ME was founded 27 years ago by a group of Australian super funds and pitches itself as an alternative to the traditional banks for everyday Australians.
Its biggest sources of revenue is home loans, which it relies largely on mortgage brokers to facilitate. The all-cash offer price of $1.3 billion represents 1.15 times ME's net tangible assets.
BoQ said the 100 per cent acquisition would create a "compelling alternative to the big banks".
Chief executive George Frazis said the deal would double the bank's retail footprint and increase retail earnings from 36 per cent to 50 per cent.
"The increase in customer numbers means BoQ Group can now provide a genuine banking alternative to approximately 1.45 million people," he said.
"Combined, the group will have pro forma total assets over $88 billion, with total deposits of more than $56 billion." Mr Frazis told a media conference on Monday morning that the deal was an "absolute gamechanger".