Listening to BOQ chief executive George Frazis, it’s a match made in heaven. ME Bank and BOQ are “highly complementary” with “similar customer centric culture” – but “the really big news” is the significant scale that the purchase will provide.
“The acquisition of ME Bank will create a compelling alternative to the big banks, providing better customer experience, greater opportunities for our people, and importantly, increase value to our shareholders,” Mr Frazis told media on Monday.
The acquisition will roughly double the size of BOQ’s retail bank and increase that segment’s earnings from 36 per cent to more than 50 per cent.
Of course, plenty of other banks have tried to take on the big four – and lost. Mr Frazis says that key to succeeding this time will be BOQ’s experience with small business and retail banking and a “state of the art” cloud-based core banking system provided by Temenos that will form the backbone of its Virgin Money, ME and BOQ offerings.
“What we’re building is a state of the art core banking system that’s all cloud based, with no customization, that we can continue to upgrade as Temenos innovates…It’s a unique opportunity and in three years’ time we’ll be in a position that makes us very competitive from a customer service and productivity perspective,” Mr Frazis said.
The acquisition will also diversify BOQ’s portfolio and build out its east coast presence – ME Bank will remain based in Melbourne and retain its branding – as it enters the second year of its multi-brand digital transformation strategy.
“I have to say it’s truly an exciting time for BOQ. The strategy is already delivering meaningful results and has laid the foundation for this game changing acquisition,” Mr Frazis said.