BOQ resets home lending data

Bank of Queensland today announced that it had reclassified housing loans under management as reported in the monthly APRA banking statistics.


BOQ Managing Director David Liddy said the figure of 5.4% (annualised) lending growth as reported by media and various analysts last month was incorrect as the figures did not include a large percentage of BOQ's growth in its home equity loan facility.


The Bank reclassified this component of its housing loan portfolio in the December APRA statistics to clarify the overall position. After this adjustment, and taking performance up to December into account, the Bank's annualised growth in housing loans under management was 10.2%, Mr Liddy said.


Mr Liddy said this annualised growth figure still did not tell the whole story.


Bank of Queensland withdrew from the mortgage broker market in June, 2004. At the time, brokers were originating almost 20 per cent of all BOQ home loans. Total home loans of $7.1 billion at August 31, 2004, included a broker introduced portfolio of $1.8 billion.


Mr Liddy has previously stated that interstate expansion by BOQ will replace the mortgage broker channel, probably by the end of the BOQ's 2005FY on August 31, 2005.


In the interim, meaningful comparison was difficult as, due to the withdrawal of broker-generated housing loans, it is not on a like-for-like basis. The growth in BOQ's branch-originated home loan portfolio for the first four months to December was in fact a very pleasing 22.5% (annualised), which is well above current system growth, he said.


It has to be remembered that the first interstate branch only opened in August last year, and the new network will take a while to get up to the levels of our previous broker business, he said.


It is therefore a mistake to take figures from our first three or four months and try and come up with a full-year effect, as we believe the true benefit of the new branches will not be felt until the second half of our financial year, Mr Liddy said.


These interstate customers are entirely new customers for Bank of Queensland, in brand new markets. Issues such as 90 day settlements in Victoria, as opposed to the normal 30 day settlement in Queensland, mean approvals take longer to flow through to the lending book, he said.


Mr Liddy said that BOQ stood by its earlier market guidance that overall lending growth would outperform system growth for the 2005FY by 1.5 times.