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The Bank of Queensland (BOQ) will buy Members Equity Bank (ME Bank) in a $1.3 billion bid to challenge the dominance of Australia’s big four banks.
ME Bank announced it would join with BOQ on Monday, after BOQ secured $1.3 billion in equity funding. Together, the group will hold more than $88 billion in assets and $56 billion in deposits. BOQ services 900,000 customers, while ME Bank has 450,000.
ME Bank’s shareholders, who represent 26 industry super funds, unanimously endorsed BOQ’s offer. The acquisition is expected to be completed by August, creating a supergroup that will combine BOQ’s Queensland-centric business with ME Bank’s Victoria-dominant business.
ME Bank said it believes the acquisition will create a “genuine banking alternative powerhouse".
"The board determined that the proposal from BOQ, which highly values what has been built by ME, was in the best interests of our shareholders and the transaction was unanimously supported by them," ME Bank chairman James Evans said.
“Today’s decision represents a permanent shift for the better in the Australian banking landscape. This agreement brings together two culturally aligned organisations to form what will be an enhanced and influential banking alternative for customers.”
The increased scale will help both employees and customers and will be able to offer a wider range of services, while the larger size of the group also adds reassurance for customers, Evans added.
Additionally, he claimed BOQ and ME make a natural partnership as the both already offer alternatives to the bigger banks with simple banking products.
"Today's announcement is another major step in our strategy to be the leading customer-centric alternative to the big banks," BOQ chairman Patrick Allaway added.
"With the addition of the ME Bank business, BOQ now has material scale and a compelling growth platform to support this ambition."
What happens to ME Bank and BOQ customers?
It’s business as usual for customers and employees, the two banks confirmed on Monday.
“We are pleased that under the proposal, the ME Bank brand and operations will be maintained. We believe ME has a valuable and compelling brand, as well as a very strong operating model,” ME Bank’s Evans said.
“ME customers will be able to enjoy the same simple and straightforward products and services we know they expect from ME Bank, along with the additional benefits of being part of a bigger bank.”
ME Bank will retain its brand, Melbourne-based presence, staff and operations, while customers’ accounts will also remain unchanged.