(29 August 2025 – Australia) BoQ is mulling a sale of its asset finance book to free-up capital and enhance sub-optimal return on equity (ROE).
James Eyers reports for AFR that the non-Big Four lender has also withdrawn its ROE and cost targets and signalled additional restructuring charges. The group’s strategy is based on selling loans to a company that doesn’t have to hold as much regulatory capital against them.
The buyer would take on both the net interest income streams and exposure to credit losses while BoQ retains an annuity-style income for origination and servicing. It would be the first transaction of its kind for an Australian bank according to BoQ.
“We are reimagining how we are doing banking and pursuing alternative opportunities to the traditional model where banks book everything on their balance sheet” BoQ CEO Patrick Allaway commented in an interview.
“It recognises that our current returns are not sustainable and will be a good way to grow return on equity. By taking the assets off our balance sheet, we can release capital and, on a risk-adjusted basis, we will be better off and able to scale faster.”
East & Partners Asset Finance service, based on direct interviews with 1,300 enterprises with active asset financing arrangements in place, confirms BoQ is the largest provider outside of the Big Four with consistent relationship share growth in the last five years and notable customer satisfaction strengths in key areas, rated best of breed for Pre-Deal Service and Pricing in particular.