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BOQ expects after-tax loss from sale of St Andrews

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The Bank of Queensland (BOQ) says the sale of its insurance arm will translate into an after-tax loss of $27-30 million, which will be reflected in its current financial year results.

BOQ announced last week it has signed an agreement to sell St Andrews Insurance for $23 million to private investment vehicle Farmcove.

The sale is subject to regulatory approvals and BOQ expects to complete the transaction before the end of this financial year.

CEO and MD George Frazis says the sale reflects the bank’s five-year policy goals made in February to deliver long-term shareholder value and profitable growth as well as improve customer experience.

“The sale of St Andrew’s represents an important strategic milestone for BOQ,” Mr Frazis said. “We are delighted to have secured a buyer that has a long-term vision for the business which includes meeting the continued obligations of policyholders.

“The divestment enables us to focus on our niche customer segments while simplifying our business model.”

A BOQ spokesman told the business is not entering into new policy agreements at this time and is focused on supporting existing policyholders.

The bank bought St Andrews Insurance (Australia) and St Andrews Life Insurance in 2010 from the Commonwealth Bank for $45 million.

The non-life insurance product range includes consumer credit protection, home and contents, landlord, motor and travel.