The Bank of Queensland has blamed previous underperformance on its complex product offerings and long processing times, as well as lagging digital uptake and tough regulatory conditions as it reveals its technology and growth-focused five year strategy.
The 165-branch bank announced its new strategy on Thursday promising to combine "traditional banking with contemporary digital capabilities" by slashing some of its 220 banking products and reducing conditional approvals for mortgages from five days to around one.
BOQ chief executive George Frazis in January. Credit:Louie Douvis
The bank also revised upwards its cash earnings guidance to be 4 to 6 per cent lower than the previous year, driven by better than expected income growth and lower default rates. In October, after unveiling a 14 per cent fall in cash profit, BOQ boss George Frazis said that in 2020 they were expecting "outcomes in line" with the" 2019 result.
BOQ's five-pillared strategy promises a "transformation" in its two-pronged digital strategy –a cloud-based digital bank offering via its Virgin Money brand and a revamp of its customer facing digital platforms including a new mobile apps. An empathetic culture, focus on niche segments of the market and strong balance sheet are also part of the strategy.
It identified the banking royal commission as creating an opportunity for BOQ as it remained unhampered by major remediation programs, unlike the big four, and a lack of trust continues to cause customers to shift to challenger banks or regional lenders.
To deliver these promises, BOQ will continue capital investment of around $100 million per year, reducing this by $20 million instalments over the next four years. It aims to pay out a dividend ratio of between 70 and 80 per cent of cash earnings, with the caveat being it is subject to required approvals.
Mr Frazis said he was confident the bank had the right strategy to grow the business.
"The work is underway and we are starting to see improvements across key metrics including customer satisfaction, home lending and business growth. BOQ is moving with pace and will build on this momentum in the months ahead," Mr Frazis said.
More to come
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