Strengthening franchise in Australia Strong credit-loss record Sound credit-risk-management capabilities Franchise expansion model unseasoned Lending profile relatively concentrated Susceptibility to slowdown in the housing sector The BBB+/Stable/A-2 credit ratings on the Bank of Queensland (BoQ) reflect improvements across the bank's business and financial profile over recent years that are likely to be sustained and further embedded over the medium term. The ratings also benefit from the bank's very good credit-loss experience and sound credit-risk-management capabilities. The bank's net interest margin, earnings diversity, and cost efficiencies are sound. Factors constraining the rating have moderated somewhat, including the absolute size of BoQ's capital base against international standards, integration and execution risks associated with its expansion strategy, and the geographic concentration of the
