But the migration has cost BOQ volume. The decline has been building since the lender paused broker originations onto its legacy BOQ platform in September 2024, steering broker flow to ME Bank as part of a strategy to cut origination costs. Loans written through ME’s broker channel made up 43% of BOQ’s total home loan portfolio at February 2026, and brokers wrote 71% of new home loans in the first half of FY26.
The payoff is meant to arrive in FY27. BOQ is now decommissioning ME Bank’s heritage technology environment and expects productivity benefits from that, and from its technology partnership with Capgemini, next financial year. It also said housing application volumes and run-off improved in the second half (March to August 2026).
Margin up, earnings down
The smaller book has not hurt BOQ’s margin. Net interest margin rose six basis points to 1.7%, helped by funding optimisation and higher interest rates, though BOQ said competition in home and business lending partly offset the gain.
Growth came from the business bank instead. Commercial lending rose 16%, or $2.1 billion, led by healthcare, agriculture and small-to-medium businesses. BOQ also sold $3.6 billion of equipment finance loans to Challenger under a new capital partnership, keeping the origination and servicing through a forward flow arrangement.
That deal helped lift BOQ’s common equity tier 1 (CET1) capital ratio 70 basis points to 11.64%, above its 10.25–10.75% target range. Customer deposits fell $3.8 billion, or 6%, as funding needs shrank with the home loan book.