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