Book it

22 Feb 2021 By Antony Currie Follow @AntonyMCurrie

Four lenders dominate Down Under. That ought to mean the second tier has to dig deep for mergers that help them compete. Yet at $1 bln Bank of Queensland is paying just over book value for ME Bank. It’s a reality check for the other targets no matter how digital-savvy they are.

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Bank of Queensland is buying online rival Members Equity Bank for just over A$1.3 billion ($1 billion). The Brisbane-based buyer will entirely finance the acquisition by selling up to 184 million new shares at A$7.35 a piece, 12.6% below the closing price on Feb. 18.

ME Bank was set up in 1994 and is currently owned by 26 Australian pension funds, known as superannuation funds. Bank of Queensland intends to retain both the brand and its target’s headquarters in Melbourne.

The deal will increase the buyer’s deposits by around 43% to almost A$57 billion, and its loans by 57% to A$74 billion, based on figures the banks reported in the middle of 2020.

Trading in shares of Bank of Queensland has been on hold since Feb. 18 pending the announcement of the acquisition.

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Aussie banks balance above topsy-turvy economy

Context News

The deal will increase the buyer’s deposits by around 43% to almost A$57 billion, and its loans by 57% to A$74 billion, based on figures the banks reported in the middle of 2020.

Trading in shares of Bank of Queensland has been on hold since Feb. 18 pending the announcement of the acquisition.

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