Clarification: BOQ and St Andrews

In an article last Friday Banking Day reported that BOQ paid "three times the capital base of the general insurance business of St Andrew's according to APRA data, and 13 times the reported 2009 profit, again according to APRA".

The article also said: "When announcing the proposed purchase of St Andrews in March, BOQ said that the gross written premium of the two insurance businesses was $75 million and there were 165,000 policy holders. Many of these are already BOQ customers who hold credit
insurance policies".

The APRA figures used related only to the St Andrew's general insurance business and did not include the life insurance business. The purchase price of the combined St Andrew's insurance business is 3.2 times the annualised profit after tax reported in 2009 and less than 0.9 times the projected capital base at completion.

In addition, the majority of St Andrew's policyholders are not existing BOQ customers.