St George in pursuit of Scot

ST GEORGE Bank is to acquire the Scottish Pacific Business Finance Group for $42 million.

SPBF is a major provider of cashflow finance solutions for small-to-medium sized enterprises in Australia and New Zealand.

St George plans to merge its own cash flow business with SPBF – giving it a 29 per cent share of the $18 billion cash flow financing market.

SPBF managing director Clive Isenberg said the merger would allow the company to fully leverage its Internet-based systems and processes.

“The combined management teams have unparalled expertise to support business growth and innovation,” Mr Isenberg said.

St George Bank managing director Ed O’Neal said the acquisition of Scottish Pacific underlined its commitment to the SME market.

“We believe that it is essential to provide SMEs with flexible and efficient forms of financing, customer administration to support their growth and participation in the emerging e-commerce marketplace” Mr O’Neal said.

St George Bank recently announced a half year profit of $136 million – up 11 per cent from $122 million in the previous corresponding period.

The directors have announced a fully franked interim dividend of 26 cents per ordinary share, payable on 3 July.

A fully franked base dividend of 67.5 per cent per converting preference share will be payable on 28 May.

Mr O’Neal said the bank had achieved profit growth in a market that remained highly competitive and influenced by increasing margin pressures.

“The continued strong performance in non-interest income is also encouraging and in line with our moves to expand our product base and develop new revenue streams,” he said.

Total assets for the group were $47 billion compared to $44.7 billion last year and this was due to increased growth in loans and receivables, investment securities and liquids.

Annualised basic earnings per share, before abnormals and goodwill, increased to 81.6 cents, up 7 per cent on the same period last year.

Mr O’Neal said St George had implemented a number of steps in forming electronic commerce alliances.

“We are continuing to form relationships in the Internet and e-commerce industry,” Mr O’Neal said.

“We are focussed on attaining new revenue growth from specialised businesses which are complementary to St George’s traditional business activities.

“Looking forward, we are confident that the implementation of our redesign initiatives, efficient capital management and our increased customer focus will lead to future improvements in earnings per share and return on equity in the short to medium term,” he said.