BOQ ‘open’ to future bank merger deal

Bank of Queensland’s Patrick Allaway said such deals had the ability to create synergies but were complex. Picture: NCA NewsWire / John Gass

Bank of Queensland boss Patrick Allaway has not ruled out a merger with another regional bank in the future but says because of various factors, there is no deal currently in the works.

Speaking to DataRoom on the sidelines of the Macquarie Australia Conference in Sydney, Mr Allaway said that mergers with regional banks were complex.

He said that the company’s share price was currently at a low point, which meant the bank was not currently in a position to do mergers and acquisitions.

But when asked if BOQ would consider a merger with its rival, he said such deals had the ability to create synergies but were complex.

It came after speculation surfaced earlier in the year that Bank of Queensland and Bendigo Adelaide Bank had held talks about a merger.

At the time, BOQ moved to shut down the suggestions saying there was no live merger talks afoot.

BOQ purchased ME bank in 2021 for $1.33bn and it was in the process of integrating the acquisition.

“Potential mergers with other regionals are far more complex,” he said.

“We have an open mind about all M&A (mergers and acquisitions).”

While speaking at the conference in a “fireside chat session”, Mr Allaway said the bank’s transformation program was a five-year program and BOQ was about two years into it.

The digital migration of ME customers on to its platform would happen by 2025.

He described intense competition not just for mortgages, but deposits, not seen since the early 1990s.

Mr Allaway said should the Australian Competition and Consumer Commission approve ANZ’s acquisition of the Suncorp regional bank, (a $4.9bn deal agreed last year) there was an expectation you would see further consolidation between regional banks or larger banks acquiring smaller players.

He said he believed there was healthy competition in the currently competitive market.

On BOQ, there were duplicates in the business following its ME merger and the bank’s cost levels in the first half of the year were not sustainable.

While there were more company failures being seen in the construction industry, Bank of Queensland had only a limited exposure, he said.

The impact of rising interest rates was often deferred, Mr Allaway added.

Shares in Bank of Queensland were trading at over $8 a year ago but closed on Tuesday at $5.84, with its market value at $3.8bn.