Bank of Queensland has vowed its move back into the broker channel is not just a quick fix solution.
In a presentation to investors, BoQ chief executive Stuart Grimshaw has tapped mortgage broker use as a short-term priority to revive the bank's struggling profits after it posted a $91m first-half loss. Grimshaw called BoQ’s foray back into the third-party channel a “quick win”, but a Bank of Queensland spokesperson has claimed the lender will not look to jump in and back out of the market.
“I don’t think this is a short-term thing. Stuart is taking a holistic view of the business and is looking at a number of opportunities. It is a short-term priority, but I don’t think it’s just a quick win,” she said.
The bank withdrew from the mortgage broker market in 2004. While it still relied on brokers to source equipment finance, the bank claimed its own branch network would provide sufficient mortgage growth. Then-managing director David Liddy had predicted the move would have a positive impact on profitability, but the BoQ spokesperson said market realities have changed since the lender withdrew.
“It comes back to the differences between now and 2004, and the percentage of the market today who are time poor and who are going to a mortgage broker to get a picture of what’s available so they don’t have to do the legwork themselves,” she said.
A move back into the market creates a potential source of contention for the bank’s owner-managers, who receive commissions under the bank’s franchise structure. But the spokesperson claimed BoQ’s return to broker use would net it a different client base than its branch network.
“We don’t really see it as a conflict or a competition, because those customers who’ve made up their mind to go to a mortgage broker, that’s their decision to do that. They’re not people who are going to walk into a BoQ branch anyway. They’re going to a mortgage broker. It’s an opportunity to get more of those customers and feed them back through our branch network,” she said.
The spokesperson said it was “far too early” to speculate on commission structures for brokers or other particulars of the bank’s third-party return. She conceded that re-opening the broker channel would take time.
“This isn’t something that’s going to happen next week. There’s a lot of review and modelling to be done before it’s rolled out,” she said.
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