Decisions on Bank Applications
Bank of Hawaii (Bank of Queensland, Limited, Brisbane, Australia)
April 28, 1998
The Board of Directors
Bank of Hawaii
130 Merchant Street
Honolulu, Hawaii 96813
Dear Board Members:
Subject: Bank of Hawaii
Honolulu, Hawaii
The Board of Directors ("Board") of the Federal Deposit Insurance Corporation ("FDIC"), on April 28, 1998, approved the application of Bank of Hawaii for consent to hold, via a wholly-owned subsidiary, approximately 10.7 percent of the issued and outstanding shares (per conversion of subordinated notes) of Bank of Queensland, Limited, Brisbane, Australia ("Queensland"), subject to the conditions included in the enclosed copy of the Order adopted by the Board and for the reasons set forth in the Statement attached to the Order.
It is FDIC's understanding that Queensland does not engage in any activities as principal that would not be permissible for a subsidiary of a national bank. Bank of Hawaii is reminded that a direct or indirect investment in a foreign organization that engaged in such activities would require prior approval from the FDIC, pursuant to Section 24 of the Federal Deposit Insurance Act.
Should you have any questions regarding this matter, please contact Assistant Regional Director J. Richard Mayher or Case Manager Louis C. Cheng in the San Francisco Regional Office at (415) 546-1810.
Sincerely,
Robert E. Feldman
Executive Secretary
FEDERAL DEPOSIT INSURANCE CORPORATION
IN RE: Bank of Hawaii
Honolulu, Hawaii
Application to Acquire and Hold Stock in a Foreign Financial Entity
ORDER
The Board of Directors ("Board") of the Federal Deposit Insurance Corporation ("FDIC") has fully considered all available facts and information relevant to the application of Bank of Hawaii, Honolulu, Hawaii ("BOH"), for consent to acquire and hold, via a wholly-owned subsidiary, the following.
(a) 5,438,000 unsecured subordinated notes from the Bank of Queensland, Limited, Brisbane, Australia ("Queensland"), which are convertible into ordinary common stock of Queensland on a one-for-one basis;
(b) 338,005 shares of Queensland from Pacific Century Financial Corporation, Honolulu, Hawaii, of which BOH is a direct subsidiary; and
(c) Additional ordinary shares of stock of Queensland in open market transactions up to an aggregate investment, including the aforementioned subordinated notes and shares, of not more than $25 million.
In connection with this application, BOH also requests permission to convert all of the subordinated notes into ordinary shares of Queensland in accordance with their terms. In the event that all the subordinated notes are converted and the additional proposed investments are made, based on the said exchange rate and open market share price, the equity interest of BOH in Queensland would represent approximately 10.7 percent of the outstanding ordinary shares of Queensland. The Board has concluded that the application should be approved.
Accordingly, it is hereby ORDERED, that the application submitted by BOH for consent to acquire and hold approximately 10.7 percent of the issued and outstanding shares (per conversion of the subordinated notes) of Queensland be and the same hereby is approved, subject to the following conditions:
1. All necessary and final approvals shall have been obtained from the appropriate state, federal, and foreign authorities; and
2. The consent granted herein is based on the facts, circumstances, and commitments presented to the FDIC in connection with this request. BOH shall notify the FDIC of any significant change in facts or circumstances. The FDIC's action is conditioned on its ability to alter, suspend, or withdraw its approval should any development be deemed to warrant such action.
Dated at Washington, D. C., this 28th day of April, 1998.
BY ORDER OF THE BOARD OF DIRECTORS
Robert E. Feldman
Executive Secretary
FEDERAL DEPOSIT INSURANCE CORPORATION
IN RE: Bank of Hawaii Honolulu, Hawaii
Application to Acquire and Hold Stock in a Foreign Financial Entity
STATEMENT
Pursuant to the provisions of Section 18(l) of the Federal Deposit Insurance Act and Parts 347 and 303 of the Federal Deposit Insurance Corporation's ("FDIC") Rules and Regulations, Bank of Hawaii, Honolulu, Hawaii ("BOH"), a state-chartered nonmember insured bank, has applied for the FDIC's consent to acquire and hold, via a wholly-owned subsidiary, approximately 10.7 percent of the issued and outstanding shares of Bank of Queensland, Limited, Brisbane, Australia ("Queensland"), a foreign financial entity.
Queensland is an Australian licensed retail and commercial bank operating in Queensland, Australia's third largest state in terms of population and gross domestic product and second largest in terms of land area. Queensland is headquartered in Brisbane, the capital of the state of Queensland and is a public company with its shares listed on the Australian Stock Exchange. Queensland's business profile is predominantly retail, having emphasis on residential, personal, and credit card loans. Over 50 percent of Queensland's lending activities are residential. Its commercial lending focuses primarily on small c9mmercial property and business loans. The primary purpose of the proposed acquisition coincides with BOH's long-term corporate strategy to "bridge" its core customer base in Hawaii across Asia, the Pacific, and the U.S. Mainland. The strategic alliance between BOH and Queensland will enable both banks to broaden their geographic reach in the Pacific Rim. Several areas have been identified in which the two banks can work together for mutual benefit, including correspondent relations, linking of information systems, and sharing of expertise and facilities, business leads, and credit risk.
The Board of Directors ("Board") of the FDIC has fully considered all available facts and information relevant to the application of BOH. Based on BOH's satisfactory condition and the minimal level of investment in relation to BOH's capital, the Board has concluded that the application should be conditionally approved.
THE BOARD OF DIRECTORS
FEDERAL DEPOSIT INSURANCE CORPORATION