The completion of the acquisition is subject to a number of conditions, including regulatory approvals, but is expected to be finalised by the end of this financial year.
The acquisition will be funded through an issue of $400 million worth of BOQ shares through a “fully underwritten accelerated entitlement offer along with excess capital”.
At a results announcement in Sydney, BOQ chief executive Stuart Grimshaw said after a “rigorous process of evaluation” the bank is confident the resources and capability of Investec’s businesses are compatible with BOQ.
Mr Grimshaw said the acquisition aligns with its four pillar strategy and will deliver “further diversification and scale benefits”.
“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,” he said.
Mr Grimshaw said both organisations also share a strong client focus that is valued by the professionals forming their client base.
BOQ said the acquisition of the professional finance business will significantly increase the size of BOQ’s existing commercial loan portfolio and increase its industry and geographic diversity.
The asset finance and leasing business will add scale in specific channels and markets and enhance leasing capability in vendor financing for BOQ Finance, the bank believes.
According to BOQ, the acquisition will also provide “cross-selling opportunities and the potential to leverage the proven specialist models of the acquired businesses to enter adjacent industry sectors”.
BOQ also announced an underlying profit of $249.2 million for its half year results, up eight per cent from $230.7 million in the previous comparative period.
After tax earnings were $104.2 million, up 17 per cent from $119.9 million in the previous corresponding period.
