THE Bank of Queensland will use Western Australia as a testing ground for a return to the use of mortgage brokers and a new branch model in an attempt to firm up its bottom line.On the back of a $17 million full-year loss, the bank has announced its intention to reintroduce mortgage brokers to its service offering - a common practice among most other major banks but dropped by BOQ in 2007.BOQ WA state manager Tracey Barnes told WA Business News using brokers wasn't part of the bank's strategy when it acquired Home Building Society in 2007, but it had now realised that decision led to the bank missing out on some business."There is a large portion of customers who do want to use the broking channel, so it makes sense for us to be in that market," Ms Barnes said."BOQ was previously heavily involved in that market, so it will be a re-entry back into that market." Negotiations are under way with a WA-based broking house to get a trial off the ground next year; if successful, the bank would look at implementation on a more permanent and national scale.Head of corporate affairs at broking firm Mortgage Choice, Belinda Williamson, said it made sense for the bank to make a return to using brokers - the majority of banks have continued to use brokers, with usage levels increasing since 2010."Given housing credit growth has continued to falter over the past 12 months, lenders (including the big banks) are wanting to take advantage of the scalability of the broker channel ... to save on staffing, operational and retail costs,” Ms Williamson said."It comes as no surprise that the bank has had to look outside of its branch network for growth in this highly competitive housing finance market.”BOQ has 29 branches across WA, which Ms Barnes said would be unaffected by the return to brokers."This is recognising that there's always going to be some customers that do prefer to deal with a broker,” she said."This model will be centralised and won't impact on our manager model because they wouldn't have been in contact with them anyway - it really just enables us to touch more customers.”BOQ is also targeting WA as its base for growth in the coming year by winning over customers with localised products and services and a modernised approach to banking.BOQ will introduce its new 'Branch of the Future' concept at the 111 St Georges Terrace branch.Ms Barnes said the branch would be more technology based and 'customer-centric', without the traditional counters and terminals.Marketing spend for BOQ's WA branches has been doubled for the current quarter in a bid to grow the customer base.The bank's loss for the past financial year - its first in two decades - was caused largely by its exposure to the struggling property market in Queensland, where 60 per cent of its loans are written.But Ms Barnes said that wasn't the reason for the new focus on WA."I don't think it's really about that; it's more about looking at the opportunity in WA and the fact that it's a market where we can have a really big impact,” she said."If you compare growth in WA to national growth ... it's very strong; the fundamental economics in WA are very strong and system growth is very high.”
© Business News 2017. You may share content using the tools provided but do not copy and redistribute.