The Pak Banker

BoQ buy­ing ME Bank

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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".

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