Investec Bank Of Queensland
Bank of Queensland has launched a $400 million offer of Investec Australia’s specialist finance and leasing business.
The bank is in a trading halt following the announcement until April 16.
In a statement to the ASX, BoQ said it had launched an entitlement offer for the $2.4 billion loan portfolio, which includes Investec’s asset finance and leasing business.
“The acquisition provides BOQ with an opportunity to obtain a leading position in attractive specialist segments, delivering access to a client base consisting primarily of medical, dental and accounting professionals,” BoQ chief executive Stuart Grimshaw said.
“It also materially increases the size and footprint of our Business Bank, providing further diversification by geography and industry sector.
It comes as BoQ reports a surge in cash earnings for the six months to February, despite strong competition and subdued growth in retail lending. Investec said following the sale it would cease to be an authorised deposit-taking institution, but would retain a ”significant business in Australia” focusing on corporate banking and property funds management.
The $2.4 billion professional finance portfolio includes its deposits, asset finance and lending businesses. It will expand the regional lender’s reach outside of its home state.
Bank of Queensland reported a net profit of $134.7 million – up 34 per cent from a year earlier.
Cash earnings rose 17 per cent to $140.2 million, a record half-year result for the bank.
Retail lending remained flat over the half as the bank ”chose to focus on quality and risk in a market where competitors are discounting heavily to achieve growth”.
Meanwhile, Mr Grimshaw said he expected to see a return to more normal house price growth but warned policy changes would be ”critical” in improving the bank’s outlook.
”With the likelihood of a return to a more normal trend in house price growth, we expect business credit growth will be the main driver behind future credit growth,” he said.
”However, there is a sense that micro-economic reform will be critical in providing further impetus to the economy.”
The bank issued an interim dividend of 32¢ a share, fully franked – up 4¢ from a year earlier.
Investec said the professional finance business was being sold as a going concern with more than 310 workers transferring to BOQ.
“The agreement with BOQ represents a significant opportunity for both the Professional Finance and Asset Finance & Leasing businesses as they pursue their next phase of growth,” chief executive Ciaran Whelan.
“We are in a good position to concentrate on what we do best within our specialist niches and to demonstrate our distinctive approach.”