BOQ to divest New Zealand asset portfolio

The news: Bank of Queensland (BOQ) has agreed to divest its New Zealand portfolio of commercial loans and finance and operating leases to local asset finance firm UDC Finance.

The numbers: The Australian lender said it will sell the NZD238 million ($221 million) portfolio at 91% of the book value. It expects to book a post-tax statutory loss of $17 million to $20 million in the first half of FY24.

The context: BOQ managing director Patrick Allaway said the deal was another step in the bank’s strategic simplification program, and would result in its exit from a non-core business as well as reduce operational complexity.

BOQ has faced a troubled year, posting a 70% drop in statutory profits in FY23 amid high restructuring costs and its integration of ME Bank. Allaway took over as MD and CEO after former boss George Frazis was suddenly ousted in late 2022.