Bank of Queensland's (BOQ) mortgage book is shrinking as competition in Australia's home loans market continues to heat up.
The Brisbane-based lender released its full-year results for the 12 months ending 31 August 2025 on Wednesday, reporting a decline in the size of its overall mortgage portfolio.
But BOQ chief executive officer and managing director Patrick Allaway said the bank had made "strong progress" on its transformation strategy, thanks to growth in BOQ's commercial lending segment and a lift in cash earnings.
"We've seen encouraging momentum across our core businesses with strong growth in business lending and have expanded our proprietary acquisition channels," Allaway said. "We continue to invest in bankers and technology, improving our customer relationships and digital banking experience."
Net profits after tax were $133 million for the year, down from $285 million in financial year 2024, while cash earnings after tax rose 12% to $383 million, up from $343 million the year before. But the bank's retail segment, which includes home loans, was down more than $3.14 billion for the year.
Allaway said the bank expects its mortgage book to “experience modest decline” as competition in home lending intensifies.
"Our retail banking banking performance reflects our conscious decision to focus on transformation and return over growth," Allaway told analysts during Wednesday's conference call.
During the latest financial year, BOQ launched a digital mortgage platform.
"This financial year will represent the peak in our mortgage portfolio contraction," Allaway said. "In the second half, we will commence originating mortgages with materially lower origination costs through the phased rollout of our digital mortgage and leveraging our commission-free converted proprietary branch channel."
In April, Bank of Queensland (BOQ) said it was doubling down on its efforts to move away from the broker third-party channel, redirecting more of its attention inward. The move sparked market chatter among some mortgage brokers about what this means for the future of broking.
BOQ Group general manager for broker and strategic partnerships Johnny Lockwood told Australian Broker: "BOQ Group values its brokers. BOQ’s broker brand remains paused, and we’ll continue supporting existing customers with their lending needs. There are no changes to BOQ Specialist and BOQ Business offerings for the broker market.
"We will continue to evaluate internal and external conditions to determine which additional brands will be made available to new customers in the retail broker channel," he added.
In addition, BOQ came under scrutiny again in June after Julian Russell, group executive for business banking, left his post at the bank unexpectedly after just three months. Russell's sudden exit added to a string of high-level departures at the bank since 2019.
