Bank of Queensland Ltd will buy ME Bank, a digital lender owned by 26 industry pension funds, for A$1.33 billion ($1.05 billion), the pair said on Monday, as the second-tier lender chips away at the lead of Australia’s “Big Four” banks.

ME Bank, founded in 1994, posted an underlying profit of A$123.9 million in fiscal 2020 with a loan book of A$25.5 billion and about A$17.2 billion in deposits at the end of June.

BoQ will fund the deal through a A$1.35 billion equity raise at A$7.35 a share.

The deal will double the size of the Brisbane-based regional bank’s retail arm, taking deposits to more than A$56 billion, and boost the division’s contribution to earnings to more than 50% from 36%, BoQ said.

Read more at: Reuters

By Nikhil Kurian Nainan Peter Cooney and Richard Pullin

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