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The regional bank agreed to purchase the $1.35 billion of standard residential loans from Western Australia government owned Keystart’s total loan book of approximately $4 billion.
Managing director Mike Hirst said the acquisition demonstrates the bank’s commitment to Western Australia.
“The acquisition complements our existing business in Western Australia and improves our geographic diversification by increasing the proportion of our loan book in Western Australia from approximately 11 to 13 per cent,” Mr Hirst said.
Bendigo and Adelaide Bank chief financial officer Richard Fennell told Mortgage Business that looking to the future, the regional bank will “continue to be opportunistic” in looking to drive organic growth.
“Quite often these sorts of acquisitions stack up very favourably, versus bringing in new business in what is a very competitive marketplace at the moment,” he said.
He added that the acquisition of part of Keystart’s loan book “helps diversify our book away from its traditional strength in Victoria and South Australia where we’re probably overweight slightly”.
He also explained that Bendigo and Adelaide Bank will continue to consider acquisition opportunities as they arise, particularly around Keystart.
“If, at some point in the future, they were to look to sell more assets from their balance sheet, then we’d certainly give that consideration,” he said.
The purchase was formalised with the Western Australian state government yesterday (Thursday 29 September) and will be completed by early December 2016.
[Related: Regional bank prices $700m RMBS transaction]