UDC Finance to buy Bank of Queensland’s NZ assets worth $238m

UDC Finance's main focus is providing asset-based finance to New Zealand businesses for purchasing plant, vehicles and equipment.

The Bank of Queensland is selling its $238 million New Zealand portfolio to non-bank lender UDC Finance.

In a statement to the Australian stock exchange on Friday, the bank said the move was part of its plan to simplify and streamline its operating model, and reduce compliance by exiting “a small, non-core lending portfolio in an overseas jurisdiction”.

Under the sale agreement the bank will sell its assets at 91 per cent of the book value.

Bank of Queensland business banking group executive Chris Screen said it was pleased to have secured a buyer in UDC, New Zealand’s largest non-bank lender.

UDC chief executive Don Atkinson said the book aligned with its core business and featured high-quality customers.

The transaction is expected to result in a post-tax loss of about A$17m ($18.2m) to A$20m for the Bank of Queensland.

The portfolio consists of commercial loans, finance and operating leases originated and serviced by BOQ Finance (NZ) and BOQ Equipment Finance.

It represented less than 0.5 per cent of the bank’s net loans and advances in the 2023 financial year and made an “immaterial contribution” to the bank’s profit in the same period, the bank said.

The transaction is expected to be completed in the second half of 2024.

Bank of Queensland is a regional bank and is not owned by one of the big four.

It is in the top 100 companies on the ASX when ranked by market capitalisation.

UDC Finance is owned by Japanese financial group SBI Shinsei Bank Group.

Its main focus is providing asset-based finance to New Zealand businesses for purchasing plant, vehicles and equipment.