RedZed yesterday announced that it had reached an agreement to acquire the business bank of non-major lender ME.
Mortgage Business understands that, prior to the acquisition, ME ran a competitive process to consider exiting its business bank and focus on its core business of residential mortgages.
RedZed managing director Evan Dwyer said the acquisition will help RedZed lift its total book value towards the $1 billion mark.
“This gives scale to our commercial finance operation and also gives us an asset finance product to offer existing customers and provides a channel to new customers,” Mr Dwyer told Mortgage Business.
“This is an exciting day for RedZed as this acquisition is perfectly aligned with our strategy to provide quality solutions to our self-employed borrowers,” he said.
“Since its inception in 2006, RedZed has carefully identified products and solutions which fit our business customer’s needs.
“Serving the financing needs of small business is a key part of the Australian economy and we are committed to growing RedZed in a way that enables us to solve this customer group’s frustrations with the status quo.”
Mr Dwyer added that RedZed has raised significant funding with long-time partners and supporters to complete the deal.
In a statement, ME said the sale allows the challenger bank to focus on growing its residential home loan book – business banking only comprised 2 per cent of the bank’s overall lending portfolio.
“Existing ME business banking customers will have their finance contracts and associated security transferred to RedZed over the coming months and all current lending contracts will remain unchanged,” ME said.
“The sale does not include ME’s existing business term deposits and business online savings accounts, which remain with ME.”
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