BOQ SECURES INVESTEC DEAL AND POSTS RECORD PROFIT

BANK of Queensland (ASX:BOQ) has signed a deal to acquire Investec Bank for $440 million, with shares in a trading halt following the announcement.

BOQ will fund the transaction through a fully underwritten accelerated renounceable entitlement offer plus excess capital.

Managing director and CEO Stuart Grimshaw (pictured) says it allows the company to diversify geographically, as well as in the industry.

“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.

“We are also excited by the strong alignment of staff and the internal culture to BOQ,” he says.

“Both organisations share a strong client-focus which is highly valued by the busy professionals who form their customer base.”

The acquisition is expected to deliver a two per cent increase on cash earnings per share in FY15 and four per cent in FY16.

BOQ also reported a record first half-year result this morning, with $140.2 million in cash earnings after tax.

Statutory profit after tax rose 34 per cent to $134.7 million, enabling the board to set an interim dividend of 32 cents per share fully franked.

Grimshaw says it’s a clear indication the bank’s strategy is working – despite highly competitive market conditions.

“Our performance over the half shows we are successfully executing our strategy and proactively managing the levers available to us to deliver results.

“We maintained a focus on profitable growth rather than compromising margins or risk standards, building momentum in our new customer distribution channels, tightly controlling expenses while investing in future growth and building our customer-focused culture,” he says.

The acquisition is expected to be completed by the end of this financial year, subject to regulatory approvals.

Trading resumes on April 16.