Bank to close branches, take on more brokers

by Mackenzie McCarty18 Nov 2013

Bank of Queensland (BoQ) says it’s looking to expand its broker network - while simultaneously closing branches - in an effort to reach a broader range of customers.

In its most recent strategy update, BoQ group executive, retail banking, Matt Baxby, says the broker channel represents a ‘significant source of growth’ and that there are compelling reasons for the lender to enter the mortgage broker market.

“Brokers account for over 40% of new mortgage volumes [and are] particularly valued by more affluent consumers,” he says in the report.

Baxby says BoQ understands that brokers are keen to diversify flows and says the bank is looking to build its broker channel presence in Western Australia, New South Wales and Victoria.

“BDMs are now on the ground in each key market and natural share will build over time.”

He says broker acceptance has so far been positive in a pilot test, with more than 240 accredited in the first stage of the expansion.

However, while the news was largely positive for brokers keen to work with the non-major bank, it comes at a cost. According to the Sydney Morning Herald, BoQ's network of branches is delivering a lower market share than other lenders' branch networks and that, as a result, it's looking at other business models.

'We have about 4% distribution in terms of points of presence, delivering 2% market share…We have a third of the size of Westpac's network, delivering about a tenth of their market share. So I think overall … we are probably slightly overweight as we stand here today.''

COMMENTS

  • by Old Joe 18/11/2013 10:11:11 AM

    Good old David Liddy, hated third party business and now they wake up and find that its not only good business but also profitable and YOU ONLY PAY FOR LOANS that SETTLE....unlike the branch where you are paying people to have lunch , coffee breaks and zoom out at 5PM.

  • by overtheborderbroker 18/11/2013 10:23:07 AM

    No way!! I have not forgotten how BOQ treated the broker channel with absolute disdain a number of years ago in favor of their own franchise network who apparently were far more skilled in writing loans than us. You reckon they won't pull the same stunt again once we've loaded up their books? Remember it's a franchise model and the franchisees have to write the business to get effectively remunerated. Karma dude...

  • by Kay 18/11/2013 10:23:51 AM

    This is good news for clients who can now access another lender via their favourite broker. BOQ was one of the few lenders brokers did not have access to. We can only hope BOQ, does not follow the NAB route and provide less than a professional service to the third broker channel, while offering a wider range of products through their branches.