The Australian Prudential Regulation Authority (APRA) has finally approved the sale of Bank of Queensland Limited’s (BOQ) St Andrew’s Insurance to Farmcove Investment Holdings.
In October last year, BOQ bid farewell to its insurance arm, St Andrew’s, after agreeing to sell it to Farmcove for $23 million, subject to certain conditions, including APRA’s regulatory approval.
With the approval, the deal is now sealed as there are no remaining conditions for completion of the sale.
In a previous statement, BOQ said it expects the transaction to result in an indicative post-tax statutory loss on sale of around $26 million and be broadly neutral to its Common Equity Tier 1 ratio.
The completion of the sale will occur on October 28, 2021. Due to the completion’s timing, the statutory loss will be recognised in BOQ’s 1H22 financial results.
In a statement last year, BOQ said 2020 was a challenging year for the company due to the impacts of the COVID-19 pandemic and several strategic foundational investments.
George Frazis, CEO and managing director of BOQ, said last year that the St Andrew’s sale represents an important strategic milestone for the company.
“We are delighted to have secured a buyer that has a long-term vision for the business, which includes meeting the continued obligations of policyholders. The divestment enables us to focus on our niche customer segments while simplifying our business model,” Frazis said.
Matt Lancaster, managing director at Farmcove, added: “We look at our investment in St Andrew’s with a long horizon in mind. St Andrew’s has insured more than 600,000 Australians over its two-decade history, and we look forward to seeing the company deliver simple and cost-effective insurance solutions for more Australians over the coming decades as an independent, Australian-owned competitor in the insurance marketplace.”