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BOQ doubles mortgage settlements in second half

BOQ doubles mortgage settlements in second half

The Bank of Queensland has highlighted the strength of its broker-originated volumes and Virgin Money mortgage business after posting a 5 per cent increase in cash earnings to $378 million.

In a trading update on Friday (13 October), the regional lender said that broker volumes have improved significantly and BOQ mortgage settlements nearly doubled over the second half of the 2017 financial year (2H17) from 1H17.

The bank noted that Virgin Money mortgage growth was $200 million in 1H17. This more than doubled to $490 million in 2H17.

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The strong result led BOQ managing director and CEO Jon Sutton to remark that one of the most pleasing aspects of the result is the improved momentum in the second half.

“The second half largely played out as we said it would at our first half result,” Mr Sutton said.

“Lending growth improved in both the housing and commercial loan portfolios. The Virgin Money Reward Me home loan portfolio has grown ahead of expectations.”

Mr Sutton said that even though the environment for banks remains a dynamic one, BOQ is well placed.

“We have seen return to growth in the second half which gives us confidence going into FY18,” Mr Sutton said.

“The industry faces challenges of low housing credit growth, low interest rates, regulatory uncertainty, increasing consumer expectations and increased scrutiny of conduct and culture.

“We have responded well to these challenges and have been able to continue delivering our strategic priorities and returns for shareholders.”

The chief executive said that efficiency remains a key focus for the group, which has embarked on a program to further improve productivity across the organisation.

“Our very strong capital position provides us with flexibility to consider options that will deliver the best value to our shareholders,” Mr Sutton concluded.

BOQ’s products, including Virgin Money home loans, are now distributed by more than 7,500 mortgage brokers.

“The broker strategy expansion continued to accelerate during the year, with 28 per cent of settlements in the second half originated through accredited brokers across the BOQ and Virgin Money brands,” the group said.

“Most accredited brokers are located outside of Queensland, which will continue to accelerate the geographic diversification of the portfolio and provide deeper access to the Sydney and Melbourne markets, where the group has traditionally been under-represented.”

BOQ doubles mortgage settlements in second half
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