CANBERRA, AAP – ME Bank has agreed to a $1.325 billion takeover from Bank of Queensland, believing it will create a “genuine banking alternative powerhouse”.

Under the acquisition, which is expected to be finalised by August, ME’s Melbourne-based presence will be retained and will not affect or change existing customers’ account arrangements.

ME Bank’s shareholders, who represent 26 of Australia’s industry super funds, unanimously endorsed BOQ’s offer, which was recommended by the board.

“The board determined that the proposal from BOQ, which highly values what has been built by ME, was in the best interests of our shareholders and the transaction was unanimously supported by them,” ME Bank chairman James Evans said.

Mr Evans said BOQ and ME are a natural fit, both being home-grown banks with a range of simple and easy to understand banking products.

“They both offer a genuine alternative to the big banks,” he said.

BOQ said the acquisition will be funded by an underwritten capital raising of $1.35 billion.

The combined group will have total assets of more than $88 billion and total deposits of about $56 billion.

“Today’s announcement is another major step in our strategy to be the leading customer-centric alternative to the big banks,” BOQ chairman Patrick Allaway said.

“With the addition of the ME Bank business, BOQ now has material scale and a compelling growth platform to support this ambition.”