The counterparty credit ratings on Bank of Queensland Ltd. (BOQ) reflect its continued sound asset quality, strengthening franchised through an expanding branch network, increasing efficiency partially through additional scale, sound capitalization ratios, and predominately retail-based funding profile. The bank's asset quality position is supported by the relatively low credit risk inherent in BOQ's largely mortgage-secured loan book, which exhibits little sectoral or size concentration. The bank has demonstrated strong asset and profit growth, but it may be challenged to further improve profitability, if lending opportunities moderate and asset quality suffers in a weaker property market. BOQ's continued success in managing these challenges is key to any future movement in the rating. Offsetting factors are the bank's current geographic concentration within
