Bank of Queensland’s (BOQ) $1.3 billion purchase of ME Bank is the biggest merger of two local banks for over a decade and with over 1 million customers between them the bank will be behind only the four major banks and Bendigo Bank (the largest second-tier bank) for total customers.
A look at the customer profiles for the two banks shows significant geographical complementarity. While both banks have a significant footprint in New South Wales BOQ’s strength is in Queensland and Western Australia while over a third of ME Bank’s customers are from its home base of Victoria.
Over 80% of Bank of Queensland’s customers are in Queensland, New South Wales or Western Australia including nearly half in Queensland, while almost 80% of ME Bank’s customers are in Victoria, New South Wales or Queensland, including over a third in Victoria.
Bank of Queensland’s customers are older than ME Bank’s with over fifth, 21.5%, aged 65+ compared to only 13.9% for ME Bank. In contrast, ME Bank’s customers are of a slightly younger profile with around 60% aged from 35-64 compared to under 50% of Bank of Queensland’s customers.
Bank of Queensland and ME Bank customers by Age
Source: Roy Morgan Single Source (Australia). Feb. 2020 – Jan 2021, n=46,431. Base: Australians 14+. Note: Bank of Queensland figures include customers of subsidiaries such as Virgin Money.
Socio-economically the two banks’ customers are also quite different with Bank of Queensland’s customers spread fairly evenly across all five socio-economic quintiles while over half of ME Bank’s customers are in the top two quintiles – either the highest AB quintile (almost a third) or C quintile (about a quarter).
Employment is also a significant point of differentiation between the two customer bases with nearly three-quarters of ME Bank’s customers currently employed compared to only two-thirds (66%) of Bank of Queensland’s customers.
This difference is also evident about the types of jobs the two banks’ customers have with small business owners significantly over-represented amongst Bank of Queensland’s customers while Professionals, Managers and Semi-Professionals are the most over-represented amongst ME Bank’s customers.
Reflecting the bank’s focus on providing home loans (ME Bank’s biggest source of revenue1) nearly half of ME Bank’s customers are currently paying off their home compared to just over a quarter who own their own home. In contrast, a slightly larger share of Bank of Queensland’s customers own their own home (36%) than are paying off their home (35%).
1Financial Year 2020 Full Year Result: ME delivers strong financial result amid COVID-19: https://www.mebank.com.au/news/fy20-full-year-results/
Michele Levine, CEO Roy Morgan, says Bank of Queensland’s purchase of ME Bank brings together two banks with significantly different customer profiles which offers challenges but also opportunities for the merged entity: