Bank of Queensland (BOQ) is doubling down on its efforts to move away from the broker third-party channel, instead focusing on its proprietary network, sparking market chatter among some mortgage brokers about what this means for the future of broking.
In the first half of 2025, the regional bank revealed rising profits, including a 6% jump in cash earnings and a 13% rise in statutory net profit, year-over-year. The bank also made clear its intentions to streamline operations, focus on its own distribution network and reduce reliance on third-party channels, particularly mortgage brokers.
"This performance in the current operating environment is validating our strategy to shift our portfolio and not grow where home economic returns are uneconomic, evidenced by a stable margin for a third consecutive half," BOQ Managing Director and Chief Executive Officer Patrick Allaway said during the results presentation.
The executive added that BOQ's proprietary channel and digital mortgages are expected to "deliver returns above our cost of capital at current rates."
The updated strategy follows BOQ's decision last August to pause the acquisition of new home loans through the broker channel, at the time citing a renewed focus on technology and preparing for the launch of its own digital mortgage platform as the drivers.
Meanwhile, the bank is chasing the promise of higher returns by way of its own network, which comes with commission-free lending. In the latest financial results, home lending through the bank's channels was down 13.53% in the year ending February 2025. The decrease in home loans is another signal of the bank's intent to prioritize economic returns over volume, while optimizing its portfolio with the hope of higher-returning assets. At the same time, business lending was up 10% during the same period.
“BOQ Group values its brokers," BOQ Group General Manager Broker and Strategic Partnerships Johnny Lockwood told Australian Broker. "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.
But with borrowers in Australia increasingly turning to brokers for their financial concerns — at present approximately 76% of borrowers Down Under use a broker — what could this mean for the future of brokers in Queensland?
Luke Ashby, financial specialist and mortgage broker at Queensland-based Emerge Finance, doesn't think it will have much of an effect at all.
"We don't write [with] Bank of Queensland, so it's not going to impact us too much. And a lot of the brokers who I know in the area don't write with Bank of Queensland either. They haven't really been a good option," Ashby told Australian Broker.
Darren Coff, managing director at Gold Coast-based mortgage brokerage Investure, added that his firm doesn't normally work with BOQ. "And the reason why we don't use them is because we had some really bad experiences where they weren't broker friendly anyway. You only go to [BOQ] if you have to go there.
"I don't see that being a huge problem for other brokers, because their broker volume is obviously not big. That's why they're moving away from the broker channel," he continued.
Still, the news caused some concern within the mortgage broker community. While BOQ has not explicitly announced a complete exit from the broker channel, the emphasis on proprietary growth and cost reduction in third-party spending suggests a potential scaling back of its broker relationships.
Lockwood pointed out that more than 70% of BOQ's home loans are still written through the broker channel, and that BOQ's direct bank brand ME Bank will "remain BOQ Group’s dedicated retail broker brand."
“To accommodate the pause in our other retail brands, we have expanded the lending composition and policy for the ME brand, which is currently aligning with the bank’s growth targets," he said.
Market players note that while a direct-to-customer model might cut costs in the near term, brokers provide valuable services by offering borrowers options and guidance and expertise across a range of lenders and products. A reduction in BOQ's engagement with brokers could limit options for some borrowers and potentially impact the bank's overall market reach.
"People come to brokers for choice, and not every client suits one particular lender's policy," Asbhy said. "If Bank of Queensland are not going to be particularly wanting to work with brokers, I don't think [the] broker market share will shift too much, if anything. Because people come to us for choice. They want to have the best deal and best options that suit their particular situation. And Bank of Queensland is just one lender with one policy. It doesn't fit everyone."
