BoQ chief executive George Frazis says he is ‘really excited’ about the ME Bank acquisition despite rising costs.Credit:Nick Cubbin
BoQ,alongside reporting its full-year results,said on Wednesday it planned to spend up to $140 million over the next two years on integrating ME Bank into its business,which will include upgrading technology and fixing weaknesses of the lender’s anti-money laundering program.
“We’re really excited by the ME bank acquisition,” Mr Frazis said. BoQ had conducted “extensive due diligence” before acquiring the business,he said,and the bank would now incorporate lessons from its previous acquisition of Virgin Money to find cost savings and turn it into a growth engine.
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“It is all about looking at the end-to-end process and improving the time to yes[the time to approve mortgage applications]. This is the critical thing,” Mr Frazis said. “The other important thing in terms of growth is how your operations are able to handle the volumes.
“Where banks get unstuck is they have either brokers or mortgage lenders that grow in terms of the home loans,but then their operations can’t handle it.”
BoQ’s share price fell by around 5 per cent to $9.25 per share on Wednesday after it flagged costs were expected to increase by another 3 per cent next year as it executes its strategy to overhaul technology,diversify geography and grow through acquisitions. Thirty-three per cent of BoQ’s business is in Queensland currently,with 27 per cent in NSW and 21 per cent in Victoria.
The bank said full-year cash earnings were up 83 per cent to $412 million over the 12 months to June 30,and shareholders would receive a final dividend of 22¢ per share,taking its full-year payout to 39¢ per share,up from 12¢ the previous year.