“There should be consolidation among the regional banks.”

Bank of Queensland (ASX: BOQ) head David Liddy issued the statement in the presence colleagues at Bendigo and Adelaide Bank Limited (ASX: BEN), Suncorp-Metway Limited (ASX: SUN). Liddy pointed at the capability of the regional banks as a basis for a merger.

"None of the regional banks has the scale. Bendigo is one and a half times our size, Suncorp is about the same size . . . ,” Liddy said.

Speculations of a $5.5 billion merger between the regional banks heightened when Bendigo disclosed interest in buying back up to 3.4 million of its shares to avoid dilution from shares issued under its dividend reinvestment plan.

BoQ was reported earlier to have been unsuccessful in seeking investors in Asia.

At least $50 million in savings over the next two years was expected under the bank's strategy known as Project Pathways. Investment deals under the project were supposed to put BoQ's cost-to-income ratio in line with the four pillars banks.

The three regional banks have a common investor: French bank BRED Banque Populaire. BRED holds about 12 percent of BoQ shares and almost 5 percent of Bendigo and Adelaide Bank. The French Institution is viewed to hold a favorable stance on regional bank consolidation.