Treasurer approved Bank of Queensland buying ME Bank

On 22 February 2021, The Bank of Queensland (BoQ) announced it had entered into an agreement to acquire 100% of the issued share capital in ME Bank for cash consideration of $1.325bn payable at completion. The acquisition was subject to regulatory approval from the Treasurer pursuant to the Financial Sector (Shareholdings) Act 1998 (Cth). 

On Monday 21 June 2021, BoQ received approval from the Treasurer to take total ownership of Melbourne-based ME Bank, which will continue to operate as a standalone business within the BoQ Group.  

The deal is expected to be formally sealed in a week, by 1 July 2021. Then, BoQ’s FY21 financial results will incorporate earnings from ME Bank for the period 1 July 2021 to 31 August 2021. 

BOQ Group Chairman Patrick Allaway said, “The acquisition of ME Bank is a key step in our strategy to be a compelling alternative to the big banks. It is a defining moment in the transformation of BOQ Group, which will benefit our shareholders, customers and people.” 

BOQ Group Managing Director and CEO Mr George Frazis said, “The addition of ME Bank to the BOQ Group will further strengthen our multi-brand strategy, deliver material scale, broadly double the size of our Retail bank, and provide us with geographic diversification. We look forward to the ME Bank team formally joining the BOQ Group very soon.” 

ME Bank will gain the benefit of BOQ’s 148 years of banking experience and prowess to help them deliver on their purpose: helping all Australians get ahead. More importantly, it would be business as usual for ME customers. 

“There will be no change to customers’ accounts or arrangements, nor the way they normally interact with ME Bank,” Adam Crane, ME Bank chief executive said. 

“As home-grown banks, BOQ and ME are a natural fit, culturally aligned and offer a genuine alternative to the big banks. Importantly, we share common values and a customer-first ethos.”

As far as some industry figures are concerned, there’s a risk of losing customers coming over due to ME’s high reliance on brokers. And there’s that one problem with multi-branding and extra marketing costs for a separate brand. 

BoQ has been targeting new loans with special offers to customers and speeding up their approval processes. Most notably is its Virgin Money brand offering of $3000 cashback for people who refinance home loans with their brands, an offer that surpasses those of Commonwealth or National Australia Bank and matches Westpac’s $3000 offer. 

This is a move that will fuel expansion and lift longer-term returns for BoQ making it the sixth-largest lender in Australia with almost $73.7 billion in loans.