ME Bank has officially become part of the BOQ Group following completion of the $1.32-billion deal.
As such, the non-major bank becomes the third brand under BOQ Group, standing alongside BOQ and Virgin Money, with all retail and SME customers on a single platform.
In the short term, ME Bank will operate as a separate authorised deposit-taking institution (ADI).
However, BOQ has confirmed that “at the appropriate time”, it will look to consolidate and surrender ME Bank’s ADI licence. It intends that the brand would continue as a standalone brand within the BOQ Group regardless.
Combined, the group will have pro forma total assets over $88 billion, with total deposits of more than $56 billion.
The BOQ board in its entirety has replaced the board of directors of ME Bank, with former ME Bank directors resigning.
The acquisition of ME Bank reportedly raises the proportion of retail loans under the group, bringing BOQ Group’s total loan book to approximately 50:50 retail/business (previously 60 per cent of BOQ’s book was for business lending).
Welcoming the completion of the deal, the MD and CEO of BOQ, George Frazis, commented that it was an “exciting day” and he was “very pleased to welcome the ME Bank team to BOQ”.
“The acquisition of ME Bank is strategically aligned and financially compelling. It further strengthens our multibrand strategy, delivers material scale, provides portfolio diversification and enables the acceleration of the digital strategy towards a common digital retail bank technology platform.”
Chairman Patrick Allaway added: “Today is a defining moment in the transformation of the BOQ Group.
“The completion of the acquisition unlocks new benefits for our shareholders, customers and people, and is a critical milestone in our multibrand strategy to create a real alternative to the big banks.”
Brokers continue to be important channel for the group
All three brands currently have strong broker flows (approximately 75 per cent of ME Bank mortgages are written by brokers, with the remainder from mortgage managers) and this channel is expected to be a strong contributor even as the BOQ Group looks to roll out its upcoming digital distribution offering via the Temenos platform.
Speaking to The Adviser earlier this year, Mr Frazis confirmed the broker channel was “extremely important” to the group.
Mr Frazis said: “We will be expanding our accreditation with brokers, if anything. It’s a channel we love, it’s a channel we really support, and it’s extremely important to all of our three brands.”
He told The Adviser: “If you think about what’s going to really drive our growth going forward, it will be to continue to provide an amazing service to our third-party brokers and aggregators.”
The CEO said in February that it was “really important” for the group to “help more Australians into their homes”, adding that the three brands provide “different segments in the Australian economy choice around that”.