BOQ wields the axe with 600 jobs to go

The regional lender has begun consulting with employees as it looks to axe as many as 600 roles as part of a simplification and digitisation drive, according to sources.

Bank of Queensland, led by Patrick Allaway, is embarking on a fresh round of job cuts. Picture: John Gass

Bank of Queensland has begun consulting with employees as it looks to axe as many as 600 roles across several units, including its retail operations, as part of a simplification and digitisation drive, sources said.

The Australian understands the cuts span areas including marketing, human resources and retail banking, as BOQ seeks to reduce costs and simplify its management and operating structure. A BOQ spokesman initially declined to comment on the quantum of the job reductions, or which areas of the bank were included.

On Wednesday, the BOQ spokesman said as flagged at its half-year results in April the bank continued “to progress its digital transformation agenda, which includes simplifying our management and operating structure”.

“These changes are essential to streamlining our operations and sharpening our focus on delivering exceptional service to our customers,” he added.

“We understand there will be an impact on some of our people from changes we make to our structure and are committed to supporting those affected, including exploring opportunities for redeployment into new roles. BOQ will remain focused on executing our transformation strategy as we continue to build a simpler, specialist bank.”

The cuts are sizeable given BOQ’s latest annual report showed it employed 3163 staff, although that doesn’t include headcount reductions that have happened since the report was published. Almost a year ago, BOQ axed 250 jobs to simplify its operations, improve systems and complete the integration of its purchase of ME Bank.

At its interim results, handed down in April this year, BOQ outlined a number of targets for its 2026 financial year spanning its operating model, technology, property and procurement and process and automation. Those targets included the reduction of some 400 full-time equivalent positions and exiting non-core businesses.

After reporting a drop in interim cash profit in April, BOQ’s chief executive Patrick Allaway flagged a range of strategic initiatives as he highlighted structural challenges the lender faced. They include ongoing pressure on net interest margins and moderating demand for home loans.

“We are addressing new pathways and additional initiatives to ensure that we meet those targets,” Mr Allaway said at the time.

The interim results presentation showed BOQ had automated 43 key processes during the half and reduced the cost per home loan settlement by 6 per cent when compared to the prior corresponding period.

Sources say Brisbane-based BOQ could cut as many as 600 jobs.Picture: NCA NewsWire /Jono Searle

BOQ is also quietly making changes to how it deals with mortgage brokers. An email, sighted by The Australian, said the lender was from the end of this month, pausing accepting any new BOQ home loan customers via the broker channel.

“We’ll continue to be active in the broker market with ME, which has been consistently recognised by the industry for its quick turnaround times and responsive coverage from a passionate support team,” the email said.

“Our ME brand is our largest in the broker market. We’ll be updating the BOQ broker portal with more details about how to manage any in-flight applications, how to access continued support for new lending for existing customers.

“We will continue to assess customer needs and market conditions to determine how our brands can support the retail broker channel in the future.”

The decision follows a similar one in September last year when BOQ paused the acquisition of new Virgin Money home loan customers through the broker channel. At the time the bank said it wanted to focus on boosting its technology, products and services “in preparation” for launching a new digital mortgage across its retail brands on its cloud-based digital bank. BOQ’s retail brands include Virgin Money, ME and BOQ.

The decision on brokers leaves ME as the only remaining brand available to a customer via a broker.

Last year, BOQ was chided by the financial crimes regulator Austrac for having subpar compliance and risk systems. It was forced to establish an action plan to rectify its systems and controls.

APRA said BOQ had acknowledged its past risk management and risk culture weaknesses, and its remediation plan would need a clear timeline for implementation that specifies “accountable and responsible persons” for each remediation activity.

With ANZ completing its acquisition of Suncorp’s bank in recent months, regional players BOQ and Bendigo and Adelaide Bank are being closely watched by investors who are scrutinising their respective strategies. They are also alert to any further mergers and acquisitions at the smaller end of the banking market.

This week a tie-up between Tasmanian lender MyState and Queensland bank Auswide was pitched as a bid for scale.