Retail banking profits at Bank of Queensland crashed over the year to August 2024, down to $88 million in cash earnings from $203 million in FY2023.
Earnings from the business bank were steady at $253 million.
In August BOQ announced plans to announced a shift in strategy, in effect converting itself into a business bank, and there were flashes of this in its full year result as the bank reduced lending to lower return mortgage business.
Housing application volumes were deliberately slowed and, despite relying on brokers for 62 per cent of flow in FY2024 (up from 50 per cent) broker turnaround 10 times blew out to 10 days.
The bank’s increasing reliance of the ME brand it bought four years ago isn’t saving its skin in retail, with ME’s market share in mortgages fading fast in recent months, though not as heavily as the main BOQ brand.
In business lending – meaning asset finance and commercial property – BOQ has a market share of 1.4 per cent and claims “funding advantages” over specialist asset finance competitors.
The bank’s “multi-year transformation investment investment spend has peaked” the bank declared, but it’s hard to believe.
BOQ’S NIM narrowed to 1.56 per cent from 1.69 per cent.
90-day housing loan arrears at August were 112 basis points, up from 100 in February and 87 a year before.