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The lender will “pause” new home loan business from the broker channel from the end of this month as it moves to “optimise the bank”.
The Bank of Queensland (BOQ) has confirmed that it will pause new-to-bank home loan acquisitions via the broker channel from 31 August, with applications accepted until 30 August 2024.
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However, existing BOQ customers will continue to receive full support, including new lending, the bank has said, and BOQ Specialist loans will not be impacted.
The move – which marks the second time the bank has pulled out of broker originations for mortgages in as many decades (having pulled out in 2004 and returned in 2012) – will mean that the 12,456 accredited brokers with BOQ will no longer be able to offer BOQ-branded mortgages to new clients from the end of the month.
It is believed that the “pause” may be temporary as the lender updates systems, with a return expected in the near future.
"We can confirm this is a pause for new to bank BOQ-brand home loan customers via the broker channel only, this is not an exit," the bank said.
According to the non-major, the change aligns with the bank’s “ongoing efforts to strengthen and optimise the bank in response to market conditions”.
The pause will not impact BOQ Group’s main broker lending brand ME Bank. A spokesperson for the bank told The Adviser: “ME broker channel will continue uninterrupted, as will the BOQ-branded proprietary channels.”
The BOQ brand has the second-lowest volume of broker-originated business out of the group’s three banking brands (BOQ, Virgin Money, and ME Bank), at around 9 per cent. Brokers writing ME Bank loans account for 31 per cent of the total book, while Virgin Money Broker accounts for 7 per cent.
Speaking of the decision to pause broker applications for new home loans, Johnny Lockwood, the general manager, broker, credit cards, & loyalty, told The Adviser: “This decision has been taken as part of BOQ Group’s ongoing digital transformation, with the broker home loan channel continuing to be transitioned away from manual and costly legacy platforms and onto the target state HLx platform, an end-to-end digital experience purpose-built for brokers and our shared customers.
“For brokers that have clients in the pipeline awaiting settlement of a BOQ-branded loan, there is no action required of the broker or customer as they will continue to be serviced, including for any new lending applications. This is the same approach that was taken with the Virgin Money pause last year, and those customers continue to be supported.
“It is also in recognition of the current ME broker channel presenting the best broker experience during this transition, consistently rated in top five for turnaround times.”
Overall, the broker channel was responsible for 63 per cent of BOQ Group’s total flow in the first half of the financial year and has originated about half of the banking group’s mortgage portfolio.
The move comes amid a period of major restructuring at the group.
It announced on Thursday (22 August) that it would be cutting hundreds of jobs from the business and pushing forward with changes to streamline distribution channels and “focus growth into the business bank”.
Indeed, it appears brokers will still be able to write BOQ business loans, with the bank saying on Thursday that it would be making “a material investment in additional business banker roles”. These will have a particular focus on targeted industry sectors including health, professional services, and agriculture.
“Our unique finance company capability will support our customers and broker across equipment finance, insurance premium funding, dealer finance, and novated leasing,” the group said on Thursday.
The shifting tides at BOQ come after several major changes at the group in recent years.
The banking group last year appointed Patrick Allaway, its executive chairman as managing director and CEO until the end of 2024, following the departure of the former MD and CEO George Frazis, who departed the bank in 2022.
Meanwhile, Lockwood moved into the newly created role of general manager, broker, credit cards,& loyalty, as part of a change to the structure of its retail distribution team to pursue its multibrand strategy following its acquisition of ME Bank.
It surrendered ME Bank’s ADI licence in 2022; however, ME Bank continues to operate as a standalone brand within the BOQ Group regardless.
[Related: BOQ announces major restructure]
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