Bank of Queensland (BoQ) is bidding to become one of the major Australian banks with nationwide coverage. The regional Brisbane-based bank has grown strongly over the last few years, both as a result of organic growth and by acquiring other players. The bank currently has around 650,000 customers, with offices in Queensland, New South Wales, Victoria and Western Australia. BoQ's market capitalization has reached A$2.7 billion.
BoQ announced three major deals in 2007, two of which fell through. Most recently, BoQ attempted to acquire Mackay Building Society, but was outbid by Wide Bay Australia. More notably, BoQ's attempt to merge with Bendigo Bank earlier this year also failed. Had the merger with the Victorian bank been completed, this would have resulted in a A$4 billion entity. Instead, Bendigo Bank chose to merge with Adelaide Bank.
BoQ's most recent successful deal was the A$400 million acquisition of Perth-based Home Building Society, which signaled BoQ's expansion into Western Australia. In order to compete with the five major Australian banks, regionals such as BoQ and BankWest are striving to achieve nationwide coverage. However, as consolidation increases, attractive deals become harder and harder to find and achieve. Further consolidation is expected in the market, and some industry executives have raised concerns with the "Four pillars" policy, which bars the four largest Australian banks from merging.
In spite of the failed takeover attempts, 2007 has been a very successful year for BoQ. Lending approvals and deposits are both up by around 25%, and profits have hit A$100 million for the first time. This puts the bank in a good position, and the next few years will determine whether BoQ can realize its ambition to become a major player in the Australian retail banking market. 'End Intelliext
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