BoQ in push to attract deposits

by John Maguire02 May 2016
The Bank of Queensland (BoQ) is setting its stall out to attract more customer deposits as a source of funding.

The Australian Financial Review reports that the Brisbane bank has asked staff to be proactive when dealing with clients and customers with the aim of increasing its flow of deposit revenue, in order to counter wholesale funding costs.

A spokesperson from BoQ said the bank was “focusing on growing our retail deposit book (like most banks) because our diversity strategy is generating a range of growth opportunities which we would like to help fund”. One of these growth opportunities is to increase its profile in the mortgage broker space.

Martin North, principal of Digital Finance Analytics (DFA), offered analysis to Australian Broker.

“The banks need to fund their loans, and they have the choice of deposits, securitisation or capital markets,” he said. “But deposits is the best choice, especially for banks with lower credit ratings. We have seen quite a demand for deposits across the board, and rates have moved up a little.”

Earlier this month, the DFA noted in a blog post  that “customer deposit growth of $1.3 billion helped BoQ maintain a stable deposit to loan ratio of 66%, with a slight fall in the proportion of long-term funding via securitisation. The ratio of long-term to short-term funding improved a little.”

As a result, believes North, BoQ will have the headroom to target deposit growth by offering more competitive rates. This could have positive knock-on effects for brokers, he says.

“The impact is that BoQ loans may be a little less competitive than others, thanks to the repricing, but they are driving volume from brokers hard, they reversed their earlier policy of not using brokers at all, so there is plenty of opportunity for brokers I think. Especially for customers a little less price sensitive. There is plenty of upside for BoQ and brokers as a result.”