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The half-yearly financial results for Bank of Queensland (BOQ) highlighted that the converted proprietary channel and digital mortgages “will deliver returns above our cost of capital at current rates.”
Going forward, BOQ is “taking action to reduce third-party spend” by “scaling lower-cost funding on our digital platform.”
The results revealed a 6 per cent rise in cash earnings after tax, to a total of $183 million. The statutory net profit after tax saw a 13 per cent increase on the same period the year prior, to a total of $171 million.
Since its decision to pause home loans through the broker channel from 31 August 2024, the signs have pointed to the bank dropping third-party altogether.
With profits up and a “higher returning proprietary channel due to commission-free lending,” fears of a departure from brokers are still strong.
“We are making considerable progress transforming to a simpler, specialist bank with a superior customer experience through our digital platform and improved shareholder returns. These results demonstrate another half of disciplined execution against our strategy, delivering on market commitments,” said BOQ managing director and CEO Patrick Allaway.
“Our improved performance and stable margin in the current operating environment validate our strategy to shift our portfolio towards higher-returning segments, and reposition the retail bank as a scalable, low-cost-to-serve digital bank.
“The Group has navigated some real challenges and is taking decisive action to enhance customer experience and improve the performance of BOQ for the benefit of our people, customers and shareholders. It is pleasing to see that the benefits from these bold decisions to simplify the business and execute our strategy are delivering positive outcomes, while recognising there is still more to do.”
According to BOQ, lending to households through the bank has dropped 13.53 per cent in the year to February 2025.
In a statement, when it confirmed a pause of broker-originated home loans, BOQ noted its “ongoing efforts to strengthen and optimising the bank in response to market conditions.”
Increased home loan competition is taking a toll and the lender is well and truly pushing towards proprietary.
Despite some volatility in home loans, business lending saw a 10 per cent growth
Also announced was the ME deposit migration, with over 140,000 customers and 235,000 accounts moved to the digital platform. Now, $1.55 billion of deposits are on the digital bank. Meanwhile, the digital mortgage pilot was successful and is ready for market launch in 2H25.
[Related: BOQ dumps over 12k brokers]
