BOQ to Unlock new Pathways to Growth

Thursday, 11/12/2008 

Bank of Queensland today announced a formal process, Project Pathways, to investigate innovative ways to continue the Bank’s growth trajectory.

BOQ Managing Director David Liddy said the global financial crisis had created a number of attractive opportunities for BOQ, given its solid base of customer deposits and demonstrated track record.

“However, the same financial crisis that has created many of these opportunities is also forcing us to review the way we would traditionally approach creating value,” he said.

“Project Pathways will review a series of options to further enhance our ongoing growth, including strategic partnerships, complementary merger opportunities and new business strategies such as portfolio optimisation and efficiency initiatives.

“There are a number of opportunities which already exist in the marketplace, so we think it’s prudent to do a fulsome examination.”

Mr Liddy said that while BOQ was very pleased with its most recent annual financial result, which saw retail deposit growth of 25 per cent and normalised cash net profit after tax up 46 per cent to $155.4 million, it would continue to focus on improving the core business and driving sustainable growth.

“The Bank’s low-risk, high-growth profile is driven largely by its unique owner-managed-branch (OMB) model, which remains a strong-performing and efficient distribution channel, particularly in relation to the sale of retail financial services products,” he said. 

“Our strong retail deposits and owner-managed branch model place BOQ in the fortunate position of being able to take advantage of some of the opportunities created by the financial crisis.

“We have recently seen our OMBs ramp up their deposit origination, with retail deposits now outstripping lending year-to-date.

“We are currently evaluating the use of the Federal Government’s wholesale guarantee to extend our term funding by accessing five-year funding through the wholesale markets, which has previously not been an option for us.”

Mr Liddy said there had been a fundamental structural shift in the Australian financial services landscape, illustrated by the recent takeovers of St George Bank and BankWest and the significant changes in the non-bank lending market.

“We will explore how we can best position BOQ to exploit the opportunities arising in this rapidly evolving market,” Mr Liddy said.

Project Pathways will be managed by Mr Liddy and overseen by a sub-committee of the Board.

“Throughout the course of the project, we will continue to remain focused on delivering outstanding service to our customers, as well as providing a healthy environment for our staff and owner-managers,” he said.

BOQ significant shareholder, Linfox, who hold approximately 7 per cent of the Bank’s stock, have expressed their support for the project.

“The Linfox Group is very supportive of the process being undertaken by BOQ, and in particular the growth ambitions of the Bank,” Linfox principal Lindsay Fox said.

BOQ has appointed independent financial adviser, O’Sullivan Partners to assist with the project.

Project Pathways is expected to take approximately six months to complete. BOQ will endeavour to provide the market with periodic updates at the appropriate time.