Compare Credit Cards
- Credit Cards Home
- Balance Transfer Rate
- Low Interest
- No Annual Fee
- Reward Credit Cards
- Business Credit Cards
- Gold & Platinum
- Debit Cards
Compare Banking
Compare Loans
Compare Insurance
- Insurance Home
- Health Insurance
- Home Insurance
- Life Insurance
- Motor & Bike Insurance
- Travel Insurance
Investment Providers
Links
Fund Manager Urges Merger of Bendigo And BoQ
A fund manager with holdings in both Bank of Queensland, and Bendigo & Adelaide Bank has backed a proposed $5.5 billion merger plan between the two lenders, even going so far as to demand that a merger takes place.
Geoff Wilson, chairman of fund manager Wilson Asset Management has said that the boards of both lenders should indeed consider the merger, which makes both strategic and legal sense.
“We’re long-suffering Bendigo shareholders and we’re annoyed and frustrated they did not accept the original BoQ offer when it arrived three years ago. In that time, they have managed to almost blow the bank up by its merger with Adelaide Bank. From my perspective, there’s a clear logic for the two to merge.” he said.
Mr. Wilson endorses the idea that a merger between the two lenders would indeed help cut costs of a combined entity whilst enabling the new merged lender to upgrade credit ratings.
A long standing complaint amongst Australian regional lenders is that lower credit ratings make wholesale funding more expensive and difficult to access.
David Liddy, chief executive of BoQ has long campaigned for a more level playing field, where the cost of funding for regional lenders are lower.
“In a financial services merger you always have one of the cost bases reduced by about 30 per cent. There would be very strong ratings effects too. You have two BBB+ organisations and their profitability would pick up significantly because of their reduced costs. You would think the rating would be pushed into the ‘A’s if the two banks were put together.” Mr. Wilson said.
In endorsing the merger, Mr. Wilson said that the boards of the two lenders must put aside any existing animosity, and seriously consider a potential deal which would likely have positive implications on its credit ratings.
“This would change the dynamics of the organisation. I think the boards have got to realise they are there to do their best by the shareholders. Bendigo Bank has destroyed their shareholders’ value in the last three years. The only reason why the board has survived is that there is not a great number of institutional shareholders on their registry. The directors would be removed if there was a strong institutional presence.” he said.
Compare Australian Personal Loan Deals
Related posts
Comments
Leave a Reply