BRW will finally declare colourful trucking magnate Lindsay Fox to be a billionaire in a few weeks and this will in part be due to the enormous profits he’s reaped from being the largest shareholder in Bank of Queensland.
And this is no passive investment. Not since Kerry Packer’s famous 1991 raid on Westpac, has a wealthy individual attempted to exert substantial influence over a listed bank. Yesterday’s hostile takeover bid for Bendigo Bank was no doubt approved by Fox’s two representatives on the BoQ board, son Peter and union mate Bill Kelty.
The Fox family bought their 10.42% stake in April 2001 and Lindsay even turned up to the opening of its Armadale branch near his Toorak mansion in 2005. Fox paid an average $6.40 for his 11.07 million shares and with Bank of Queensland rising 16c to a record high of $16.75 this morning, his paper profit is a tidy $115 million.
The bank cartel has been Australia’s most lucrative earner since the Howard Government was elected and decided to allow consumers to be gouged mercilessly. There isn’t a cartel like it anywhere in the world, yet BoQ CEO David Liddy was on Lateline Business last night talking up big bank mergers as well as his own scheme.
The idea that Treasurer Peter Costello and his mate Graeme Samuel will allow their mutual mate Lindsay Fox to get his hands on the one shining light in banking, Bendigo’s community banking model, is disturbing to say the least.
The cartel wants to rub out anyone who dares to offer good service and low fees that make them look bad – but none of them have the brand to knock off Bendigo. Step forward Bank of Queensland with Lindsay Fox leading the charge.
Bendigo Bank doesn’t have any shareholders over the 5% disclosure limit and its board is dominated by outsiders from the traditional director’s club. The annual reports stresses that three of them, Jennifer Dawson, Richard Guy and Donald Erskine are “Bendigo-based directors”.
CEO Rob Hunt first joined as an employee in 1973 and has been CEO since 1988, whilst Richard Guy retired as chairman last year after 25 years on the board. The new chairman, Robert Johanson, has been on the board for 19 years and he’s also a director of Grant Samuel, which clearly won’t be able to do any independent expert’s report.
The board and management are clearly going to dig in for a fight, but it is worth remembering just how much fees and charges have risen after each small bank was swallowed.
Oh for the days of Advance Bank, Challenge and the Bank of Melbourne keeping the big boys honest.