The BBB+/Stable/A-2 credit ratings on the Bank of Queensland (BoQ) reflect the bank's strong market position in the growing Queensland market, increasing national footprint with the associated scale benefits, and conservative liquidity and capitalization. The bank's credit quality has deteriorated marginally but is still very low. Although some performance issues are surfacing in its branches in New South Wales (NSW), the owner-managed branch (OMB) model has helped the bank to adapt in an increasingly volatile environment. The funding mix has improved with the bank's increasing focus on raising retail deposits to supplement pressures in the wholesale market. BoQ has also embarked on cost-saving initiatives across the entire organization, which are expected to further improve its operating efficiency. However, BoQ's acquisitive
