Bank of Queensland? Bank of Sydney more like it

Bank of Queensland may have been founded in the Sunshine State almost 150 years ago but you wouldn’t guess it looking at the board which is made up of Sydney-siders and Melburnians.

Bank of Queensland may have been founded in the Sunshine State almost 150 years ago but you wouldn’t guess it looking at the board which is made up of Sydney-siders and Melburnians.

BOQ on Monday said volatile global financial markets were a factor in the bank delaying the appointment of a permanent chief executive following the shock departure of George Frazis last year. Instead Patrick Allaway will serve as managing director and chief executive until December next year on an annual remuneration package of $1.5m with non-executive director Warwick Negus named as the new chair. Both are based in Sydney.

Addressing the lack of a Queenslander on the 7-person BOQ board, Mr Negus yesterday said the search was on for a new director and “if possible” it would be good to have a Queensland-based person. But he says a wider range of skills were needed not just where a person lived.

Founded in 1874 in Brisbane, BOQ has been called the “Bank of Sydney” by some detractors because of its predominance of directors and executives based in southern states.

Mr Allaway said the Australian banking system remained strong despite global jitters caused by the collapse of Silicon Valley Bank and the takeover of Credit Suisse.

“We have a strong, stable banking system in this country but clearly capital markets globally are facing difficulties,” Mr Allaway said. “The wholesale market is challenging but we have very strong domestic deposits. BOQ itself in a strong capital position.”

Mr Allaway said it had been BOQ’s intention to have someone permanently in the chief executive role by now, but given financial markets at the moment it was best to continue the search, both externally and internally, for a candidate.

“It will give us the stability and continuity given current markets,” said Mr Allaway. “This will allow us time to continue the search externally for a wider pool of candidates and also allow time to build up internal candidates.”

Pictured in Sydney: BOQ chair Warwick Negus and CEO Patrick Allaway. Jane Dempster/The Australian.

BOQ has seen a string of executive departures over the past 18 months. Along with Mr Frazis others heading for the exits include financial boss and operating chief Ewen Stafford, chief customer officer Danielle Keighery and head of business banking Fiamma Morton.

Flamboyant Mr Frazis, whose high-society wedding was attended by Malcolm Turnbull, Carla Zampatti and Alan Joyce, left the bank after the board decided the chief executive of three years was not the right fit for the 149-year-old Brisbane bank.

Mr Frazis, who previously held executive roles at Westpac and NAB, inherited a bank with antiquated loan approval systems, slow customer service and lagging digital offering

Mr Allaway’s executive career includes stints with Citibank and UBS, besides board roles at Metcash, Fairfax Media, Woolworths South Africa, David Jones, Country Road Group and Nine Entertainment.

He said there was hope for a pause in interest rates increases after the RBA this month hiked borrowing costs to a new high of 3.6 per cent, in a fresh blow to mortgage holders already struggling under the weight of a series of rate rises. BOQ said it had seen no increase in mortgage stress among its customers. “We are in uncharted territory (in terms of the economy), but we are still hopeful of a soft landing,” said Mr Allaway. “Clearly we are in for more difficult times with cost of living increases.”

BOQ CEO Patrick Allaway. Jane Dempster/The Australian.

Mr Allaway hosed down speculation of a merger between Bank of Queensland and Bendigo and Adelaide Bank, creating a $10.3bn fifth banking pillar. “We are not in talks with Bendigo Bank even though we know there has been speculation about that,” said Mr Allaway.

“We will continue to look at M&A opportunities, but we are happy with our stand-alone strategy. We have a proud 150 year history which we want to continue.”

Analysts say a merger would mean an expanded branch network and reduced costs. But both banks have implemented stand-alone strategies to modernise their IT platforms, as well as develop their millennial brand and digital offerings.

BOQ in 2021 purchased ME Bank, formed in the 1990s as a “digital bank” with no physical branches, for $1.32bn, allowing it to roll out a national cloud platform and giving it the financial strength to invest further in modernisation. “Out digital program is continuing with plans to add ME bank to the BOQ app,” said Mr Allaway. ”BOQ has several programs underway to build a leaner more agile and digitally enabled bank.”