...VR Underpins IDR: Bank of Queensland Limited's (BOQ) Long-Term Issuer Default Rating (IDR) is driven by its Viability Rating (VR) and reflects the bank's risk profile, which is largely concentrated in residential mortgages. The assigned VR is in line with the implied VR. Economic Growth to Slow: Fitch Ratings expects the high inflation and rapid interest rate hikes in 2022 and 2023 to result in higher unemployment in Australia through 2025. However, the weakening should be manageable and not result in sharp asset-quality deterioration. We factor in high household leverage into our operating environment assessment to reflect households' susceptibility to sharp interest-rate hikes, resulting in a score at the lower end of the 'aa' category. Modest, Stable Franchise: BOQ's business profile factor score reflects its simple business model that focuses on the provision of lower-risk residential mortgages and secured commercial lending. The bank's modest franchise acts as a constraint on this...
