A merger of Suncorp and Bank of Queensland, and then possibly a separation of the expanded banking business from Suncorp's insurance business, may be a more likely option than any kite flying about Asian bank interest in becoming a strategic partner of BOQ.
The Herald Sun reported that management of Suncorp and BOQ "examined options on how a deal would generate value for both sets of shareholders."
While an obvious option from a short menu of choices for each of the financiers as they seek to refresh their business strategy, the folding of BOQ into Suncorp may be one of the few viable options.
BOQ is more than six months into a strategic review designed to identify a strategic partner (in which it is likely to either buy other banking businesses or be sold) while Suncorp has adopted a narrower banking strategy and is searching for a new chief executive.
One version of the merger scenario picked up by bankers that who have had discussions with BOQ is that David Liddy, the Bank of Queensland chief executive, may emerge as CEO of the expanded entity.
A Suncorp- BOQ merger would also play well to any lingering Queensland parochialism and cater to the enabling legislation for Suncorp that dictates that head office remains in Brisbane.
Recent public comments of the Australian Competition and Consumer Commission also lend weight to the conclusion that a Suncorp- BOQ merger is one of the few options open to each on seeking improved scale in their banking business.
Graeme Samuel, chair of the ACCC<, said last month that the regulator would examine "very rigorously" any further major bank takeovers of regional players.