Bank of Queensland acquires ME Bank for more than $1.3 billion

The Bank of Queensland (BOQ) has bought ME Bank for more than $1.3 billion in a move designed to take on the nation's big four banks.

Announcing the move to shareholders this morning, BOQ said the acquisition should create "a compelling alternative to the big banks".

It will cost BOQ $1.325 billion, to be fully funded through equity raising.

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BOQ's Chairman Patrick Allaway said the acquisition will help the bank create a better value proposition for customers compared to the big four in CBA, Westpac, NAB and ANZ.

"Today's announcement is another major step in our strategy to be the leading customer-centric alternative to the big banks. With the addition of the ME Bank business, BOQ now has material scale and a compelling growth platform to support this ambition," Mr Allaway said.

"The shared purpose and values generating greater value for customers, employees and shareholders."

Managing Director and CEO George Frazis said the acquisition will double the bank's size and serve almost 1.5 million customers.

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"The addition of ME Bank is expected to broadly double the size of the Retail Bank, increase retail earnings contribution from approximately 36 per cent to greater than 50 per cent and balance out our East Coast presence," Mr Frazis said.

"The increase in customer numbers means BOQ Group can now provide a genuine banking alternative to approximately 1.45 million people."

Completion of the acquisition is on track to be finalised before the end of the 2021 financial year, pending regulatory approval.