MELBOURNE (S&P Global Ratings) April 17, 2024--Margin pressure will likely persist for Australia-based Bank of Queensland Ltd. (BoQ, A-/Stable/A-2). This reflects continued competition in the Australian residential mortgage market and higher cost deposit funding. The bank's net interest margin contracted a further 3 basis points (bps) for the six months to February 2024. BoQ will continue to be a price taker in the Australian banking system, where strong competition, particularly in the residential mortgage market continues to affect the banks' lending growth. Reflecting this is a contraction in its residential lending portfolio of about 0.5% for the first half of fiscal 2024 (year ending Aug. 31). Further, we expect competition for deposits to remain strong as the system replaces the
