Buoyant BoQ ramps expansion
BANK of Queensland will continue its aggressive interstate expansion using a franchising model, undeterred by a group of ex-franchisees in NSW who say the model is not sustainable in high-cost, metropolitan Sydney.
Chief executive David Liddy lauded the bank’s $92.7 million profit, up from $89.9 million, which he said was achieved in the most competitive banking environment in memory.
Underlying profit, which strips out one-offs, was up 21 per cent to $82 million on a like-for-like basis, due to a steady net interest margin and growth in lending and deposits at a rate well above the overall banking system.
Credit quality was maintained, he said, amid a 33 per cent rise in loan approvals, an 18 per cent hike in retail deposits and a 22 per cent rise in loans under management.
A bullish Mr Liddy, foreshadowing no let-up in the bank’s expansion, said the “sweet spot is yet to come”.
With 42 branches opened in six states and territories last year, he said a further 25 would be added this year, taking the total network to 240 including 100 owner-managed branches. “No retailer, let alone a bank, has taken on such a task and succeeded,” he said. BoQ, according to Mr Liddy, would increase its earnings per share by 10-12 per cent in 2007, and exceed lending and deposits in the banking system by a factor of 1.5 to 2, as it did last financial year.
Outside Queensland, NSW is BoQ’s most important market with 48 branches; about 35 of them are in Sydney.
The bank, however, is facing legal action by the former owners of the Castlereagh Street franchise in the CBD, who have alleged they were deceived into continuing to operate the branch, incur losses and solicit business for the bank. BoQ has said it would vigorously defend the case.
The ex-owners of the Hurstville and Maroubra Junction branches have claimed, as well, that they were terminated by the bank because they “stepped out of line” by seeking a meeting with senior management about the owner-managed branch model.
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