Country Report Australia October 1996 Main report

Money & finance: Merged Metway/Suncorp bank will stay in Queensland

The Queensland state legislation relating to the bank formed by the merger of the Metway Bank, the Queensland government owned Suncorp insurance group and building society and the Queensland Industry Development Corporation (3rd quarter 1996) requires that the bank remains headquartered in Queensland. In addition, a majority of the bank's board of directors must be residents of Queensland. The tight restrictions are widely expected to reduce the attractiveness of the bank when the Queensland government sells its holding (in around five years' time).

In early September Queensland's minority coalition government failed to block an amendment to the legislation establishing the merged bank. The amendment effectively excludes the state government's 45% stake in the Bank of Queensland from the merger.

In mid-September the chairman of Suncorp and two other directors resigned in protest against the plan, which they believe is not in the best interests of Suncorp or Queensland. The chairman and one of the directors also sit on the board of the Bank of Queensland.

© 1996 The Economist lntelligence Unit Ltd. All rights reserved
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