BOQ Group home loans rose 8% in FY22

According to the results, home lending across the group’s three retail banks (BOQ, Virgin Money Australia [VMA]) and the recently acquired ME Bank) was up $3.8 billion in FY22.

When including BOQ Specialist, the growth in home loans came in at just under $4.4 billion, with the full mortgage book closing the year at just over $63.4 billion.

The growth in FY22 was a 263 per cent increase on the growth achieved in FY21, when just over $1 billion of mortgage growth was achieved.

On a brand-by-brand basis, BOQ achieved the largest amount of growth in FY22 ($1.5 billion), followed by VMA ($1.2 billion), ME Bank (up $1.1 billion) and then BOQ Specialist ($579 million). 

Brokers contributed to writing the vast majority of BOQ-branded home loans — responsible for $1.4 billion of the $1.5 billion growth — as settlement volumes increased 14 per cent. 

The banking group outlined that the third-party channel performance was “enabled by quality third party relationships, on boarded in FY21, and the continued investment and uplift in the broker support ecosystem”. 

The overall reach of the banking group into the third-party channel also grew, with accreditations up across all three brands.

There are now 15,900 accredited brokers with the group.

Broker flow for FY22 was up to 55 per cent — with the third-party channel responsible for 45 per cent of the portfolio.

Around a quarter of the portfolio was originated by brokers writing ME Bank loans.

Noting the turnaround in ME Bank’s performance since BOQ acquired it last year, the group flagged that ME Bank had actually “returned to growth” earlier than forecast, with the portfolio growing by $1.1 billion (or 5 per cent on FY21). The bank, which was acquired in July 2021, had closed the previous financial year (ended August 2021) down $1.4 billion. 

According to BOQ Group, ME Bank’s return to growth was primarily attributable to “mortgage simplification and integration activities focused on re-energising the broker and customer experience, simplifying process and policies and improving customer maintenance and retention”. 

Managing director and chief executive George Frazis commented: “We have delivered a solid result for the year. Our continued focus on improving the customer and broker experience has resulted in strong, quality business momentum. 

“In the housing portfolio, we have returned ME to growth and maintained our above system growth for both BOQ and VMA. 

“In our business portfolio we have maintained our focus on supporting family businesses and have grown our SME market share during the year. Growth has resulted in a 1 per cent increase in income for the year, despite the impact on margins from ongoing competition and significant volatility in swap rates.”

Overall, the group’s statutory net profit after tax (NPAT) increased 15 per cent to $426 million, but cash earnings of $508 million dropped 5 per cent from FY21 given the provision write-back in the previous year.

Looking to the future, Mr Frazis added: “We have advanced our strategy and have a clear pathway to 2025 which builds on the success of our execution to date on the digital transformation and the ME integration.

“We are a step closer to building a truly multi-brand, cloud-based, digital retail bank with the launch of myBOQ joining VMA on the new common core digital banking platform to enhance our customer experience,” flagging that the integration program was “well progressed with synergies ahead of plan and key milestones delivered during the year”.

“We remain firmly focused on delivering on our strategy to create real competitive advantage, transform BOQ into a future fit digital bank and create a compelling proposition for our shareholders, customers, people and the community,” telling shareholders that the group intends to have a digital mortgage for new customers across all brands in 2024/25.

[Related: BOQ reports strong broker uptick]