Bank of Queensland is reaping the benefits of an overhaul of its distribution channels and it isn't done yet.The bank has reduced its branch network and increased its sales through brokers. In the year ahead there will be more branch closures and a bigger push into the broker market.And next year BOQ will start its long-awaited distribution of home loans and deposits through its Virgin Money subsidiary.BOQ made a net profit of A$318 million for the 12 months to August - an increase of 22 per cent over the previous corresponding period. Cash earnings of $357 million were up 19 per cent on the previous period.The return on equity was 10.7 per cent.The bank addressed its key weakness of recent years - poor lending growth. Total lending grew at 0.8 times system growth, compared with 0.3 times system in 2013/14 and 2012/13. Gross loans and advances grew 6.8 per cent to $41 billion.The bank's housing finance portfolio grew by 7.1 per cent over the year to August, compared with system growth of 7.9 per cent. The business finance portfolio grew 7.9 per cent, compared with system growth of 9.2 per cent.The bank managed strong growth while also increasing its margin - up 15 basis points over the year to 1.97 per cent. The was due, in large part, to the contribution of BOQ Specialist  - formerly Investec's professional and asset finance division, which was acquired in July last year (see separate story).It also maintained its credit quality while growing. The bank's loan impairment expense fell 14 per cent from $86 million in 2013/14 to $74 million in the year to August. The value of impaired assets was $237 million in the second half - down 19 per cent from $293 million in the second half last year. New impaired assets were down from $110 million to $74 million over the same period.However, there was a small increase in commercial and equipment finance arrears. The increase in equipment finance arrears was related to the bank's mining industry exposure. BOQ chief executive Jon Sutton said the bank's direct mining industry exposure was less than $200 million, representing 2.3 per cent of its finance industry exposures.BOQ has done a lot of work on its network of 204 branches. It closed 18 during the year and relocated others. It plans to close another 18 or 20 this year, before the current project is completed.About two-thirds of the branches are franchised to owner-managers. Sutton said the bank remained committed to this model, saying its top OMB branches performed as well as any bank branch in the Australian market.On the broker side, BOQ is working with 2500 accredited brokers, who were responsible for 15 per cent of its mortgage originations during the year. Sutton said the number of accredited brokers would grow to 4000 in the current year and the bank was confident of being able to originate between 35 per cent and 50 per cent of mortgage sales through brokers eventually.BOQ bought Virgin Money in