Broker numbers at the
Bank of Queensland (BOQ) have expanded in size and location as the lender enhances its own loan products and develops its Virgin Money offerings.
BOQ’s latest half yearly financial results show more than 7,500 accredited brokers distributing the bank’s loan products, including those of Virgin Money. In the second half of FY17, 28% of all mortgage settlements for the group originated through intermediary channels. The bank measures its financial results from August to August with its half yearly results coming out in February.
Most accredited brokers are located outside of the bank’s home base of Queensland as BOQ further expands its national footprint. The results gave a more detailed breakdown of BOQ and Virgin Money brokers in different states and territories across the country:
| |
BOQ brokers |
Virgin Money brokers |
| Queensland |
759 |
649 |
| NSW & ACT |
1,348 |
1,061 |
| Victoria |
1,044 |
923 |
| Western Australia |
703 |
534 |
| South Australia |
157 |
225 |
| Tasmania |
23 |
39 |
| Northern Territory |
25 |
16 |
More than half (52%) of BOQ’s total loan portfolio now comes from customers outside of Queensland.
Rate repricing on investor loans as well as interest-only loans contributed to the bank’s net interest margin (NIM) by five basis points. However, lower rates offered on new loans and repricing to retain existing BOQ customers reduced the NIM by four basis points.
While overall mortgage growth was flat, BOQ’s housing lending portfolio grew by 2% to $30.3bn between H1 and H2 of the financial year thanks to strong growth in Virgin Money and BOQ Specialist mortgage offerings. The Virgin Money portfolio grew by $490m during the second half of FY17, taking the entire portfolio to $700m.
“BOQ maintained prudent credit settings and took a conservative approach to regulatory compliance, moving much earlier to adopt enhanced servicing, validation and responsible lending practices than many of its competitors,” the bank wrote.
“BOQ’s relative under-representation in higher growth markets such as Sydney and Melbourne also constrained growth rates.”
Impairment levels amongst mortgages remain low with the percentage of residential loans 30 days past due increasing by four basis points to 1.02% between the first and second halves of the financial year. The number of residential mortgages 90 days past due increased by three basis points to 0.50% during the same time period.
These arrears figures are in line with expectations, the bank said.
“Low interest rates and relatively stable employment markets across most of the country continue to benefit mortgage customers.
“Weakness in the Central Queensland and Western Australian economies with higher under-employment and unemployment levels, as well as the lagged effect of the weather event in Queensland in the second half, had an impact on payment performance.”
Early next calendar year, BOQ will be rolling out a direct online channel for Virgin Money to complement its broker presence. The bank will also be launching a new website that offers personalised content for customers.
Cash earnings after tax increased by 5% year-on-year to $378m (or $362m excluding the impact caused through the sale of the bank’s vendor finance entity) while statutory net profit rose 4% to $352m.
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