Bank of Queensland has tipped mortgage broker use as one of its key strategies in turning around a $91m first-half loss.
BoQ chief executive Stuart Grimshaw has tapped mortgage broker use as a short-term priority to revive the bank's struggling profits. In a presentation to investors, the bank called opening the mortgage broker channel "a quick win" to ramp up business.
The bank withdrew from the mortgage broker market in 2004, instead paying commissions to its owner-managers through its franchise model. 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 said in 2004 that the bank would focus on "ensuring we provide exceptional customer service through our own channels, rather than relying on third-party sales people".
"We are different from the major banks, which have a mature branch network and so achieve productivity gains through the broker channel. In our case, the broker-originated loans provide too low a yield to pursue as we move forward. In effect, we are growing sufficiently fast organically without the need for mortgage broker-generated loans," Liddy said.
In withdrawing from the channel, Liddy said the bank had made a "positive move" which he predicted would have a positive impact on profitability.
Floods submerge BoQ profits