BOQ BOLSTERS FINANCE DIVISION WITH $20M BUYOUT
21 December 2016, Written by Business News Australia
IN LINE with its strategy to target niche segments, Bank of Queensland (ASX: BOQ) has announced that it will acquire Centrepoint Alliance Limited's (ASX: CAF) premium funding business for $20 million.
The premium funding arm currently originates around 30,000 new loans per annum mostly to small and medium-sized businesses.
In FY16 the division generated $377 million in gross written premiums, distributed through more than 420 commercial insurance broker relationships.
According to BOQ managing director and CEO Jon Sutton (pictured), the buyout was a natural choice to bolster its existing finance business.
"BOQ Finance has developed expertise in offering specialised financing solutions for the SME sector through proprietary and third party distribution channels," says Sutton.
"Premium funding complements BOQ Finance's existing product offering, providing customers with a valuable cash flow management tool for addressing their critical insurance needs.
"Under BOQ's ownership, the business will benefit from funding cost synergies, whilst also providing opportunities for product expansion."
Following completion of the sale, which is expected to take place before the new year, the premium funding business will be rebranded to form a new division within BOQ Finance.
BOQ opened this morning at $11.90, following yesterday's 3.04 per cent rise.
Author: Business News Australia