Standard & Poor’s Ratings Change

Wednesday, 07/12/2011 

Standard & Poor's has announced that, following a review using revised bank criteria, they have lowered their long-term issuer credit rating on BOQ to 'BBB' from 'BBB+'. The short-term rating is affirmed at 'A-2' and the outlook is stable.  

The ratings change is the result of a review to S&P’s global bank rating methodology and, earlier this week, Australia’s four major banks each saw their ratings downgraded by one notch. 

In announcing the change to BOQ’s rating, S&P noted: 

‘Our ratings on BOQ reflect the anchor SACP for a bank operating only in Australia; plus BOQ's moderate business position, adequate capital and earnings, adequate risk position, below average funding, and adequate liquidity. 

‘The stable outlook reflects our view that BOQ will improve its key asset-quality metrics in the short-to-medium term, reducing the prospect of downward rating pressure on our assessment of its risk position*.’ 

BOQ Managing Director and Chief Executive Officer Stuart Grimshaw said “We are pleased that BOQ has retained its short-term rating at A-2 and stable outlook. 

“While obviously we are disappointed that S&P has lowered their long-term issuer credit rating on BOQ, as at 31 August 2011 our reliance on offshore wholesale funding was actually just 1.5% of the Bank’s total funding. 

“We believe BOQ remains a well capitalised Australian Bank with a strong funding and liquidity position. 

“As at 31 August 2011, the Bank’s Total Capital ratio was 11.4% with Tier 1 Capital of 8.4%. The Bank also held Liquidity in excess of its regulatory requirements with total liquidity of 16.5%. 

“Our focus remains on offering our customers a unique and personal banking experience and we look forward to a stronger year in 2012.” 


*S&P Research Update: Australian-Based Bank of Queensland Ratings Lowered On Criteria Change; Outlook Stable