BoQ staff satisfaction survey dips lower than bank management expected

STAFF satisfaction levels at BoQ, one of Qld’s flagship companies, have fallen lower than bosses expected and employees are increasingly quitting.

STAFF satisfaction levels at BoQ, one of Queensland’s flagship companies, have fallen lower than bosses expected and employees are increasingly quitting.

Management at the 176-branch bank, with 2564 staff, blamed the results on frustration with old technology and said scores reflected industrywide issues.

Some staff and the Finance Sector Union also argue tension is spilling over from the royal commission, employees are struggling with resourcing and a disconnect exists between some senior BoQ ranks and coalface workers.

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The internal staff polling was revealed in BoQ’s full-year results out on Thursday, which detailed a 5 per cent dip in profits to $336 million and drew mixed responses from analysts.

A survey found staff “engagement” levels were at 53 per cent for 2018. It had been at 67 per cent in 2015 and was 60 per cent by 2017. The accounts said methodology was changed in 2017 to meet best practice.

Voluntary turnover was meanwhile at 19.9 per cent in 2018, after having fallen from 19 per cent in 2015 to 16.8 per cent in 2017.

“Certainly engagement levels were lower than expected. That is also reflective of industrywide engagement … but that’s something I take personally seriously,” BoQ managing director Jon Sutton said.

“There’s quite a lot of work that we are doing … around our technology. There is a general level of frustration about the pace of change.”

The company was significantly investing in digitising both client-facing and back-office operations to alleviate problems, he said. It also took “pulse” surveys of teams, he said.

Whistleblower complaints also rose from 2 in 2015 to 17 by 2018. Mr Sutton said this did not reflect any culture problems and people were encouraged to use the hotline.

FSU acting local executive secretary Gaye Vale agreed IT had been an irritation for staff and the commission had caused angst sectorwide. “A greater frustration at the moment is a lack of staff,” she said.

“Members are telling us there’s a real disconnect between what some senior managers believe is happening on the ground, and what is happening on the ground,” she said, citing staffing levels as an example of the differing opinions.

Rival Suncorp’s employee engagement score was 62 per cent in 2017 – and only now is doing its latest survey. Voluntary turnover was 14.4 per cent in 2018.

Shares in BoQ meanwhile retreated 22c to $10.79.

ANALYSTS REACTION

Analysts at Citigroup, Deutsche Bank and Morgan Stanley all said the bank’s improvement in margins was a positive aspect of the results.

But some analysts also pointed out that BoQ’s preferred “cash” profits of $372 million excluded several items, including $11 million in software writedowns, $9 million in regulatory costs and $5 million in class-action expenses.

If these were included, Morgan Stanley analysts said second-half profits were 10 per cent below what the market had been expecting.

Deutsche Bank analysts, who said the headline result “looked stronger than it was”, said growth in the home loans continued to be subdued for BoQ. “Whilst it may still be early to judge, we would have expected an improvement given peers should be converging to BOQ as (those rivals) tighten lending policies and as (BoQ’s) branch network stabilises,” the analysts said.

Citigroup analysts said lower bad-debt levels were helping earnings yet “the flat core profit outlook is unchanged with revenue growth expected to remain below cost growth”. Still, Citigroup said BoQ’s business banking growth was “a key strength”.

“The ‘niche segments’ strategy appears to be working,” the analysts said.

As detailed in The Courier-Mail earlier this year, BoQ is bulking up on differentiation strategies, such as being the lender of choice to sectors such as doctors or dentists or using its finance division to provide banking services to businesses from car importers to manufacturers.

“People often look thru the prism of BoQ as just a retail bank,” Mr Sutton said after this week’s profit results. “We’re more than a retail bank, 60 percent of the business’s ... profit is now coming through our business bank.”

Contact: Liam Walsh [e-mail]