Bank of Queensland said on Wednesday its three digital brands, MyBOQ, ME Bank and Virgin Money Australia, had about 750,000 customers - 72 per cent of its total customer base.
It said the brands were taking in 87 per cent of all retail deposits, with three-quarters of Bank of Queensland's new mortgages also originating from the digital platforms.
"Our priority in retail banking remains clear, to reset the economics of home lending and improve returns by scaling a lower-cost-to-serve digitally enabled model," chief executive Rod Finch said.
With future functionality releases scheduled to be rolled out in the second half and in 2026/27, Bank of Queensland estimates it will cut the cost of originating accounts in half.
The bank is also exploring the use of AI to further reduce costs, particularly in the contact centre, Mr Finch told analysts on a conference call.
Bank of Queensland has 107 branches, having closed some after it compulsorily acquired 114 franchise branches from owner-managers in 2025.Â
"We think with the digital bank available in depositing through the BoQ brand, there's a great opportunity to continue to grow through the branches as well, and it's part of our thinking going forward," Mr Finch said.
The bank on Wednesday announced a net profit of $136 million in the first half of its financial year, down 20 per cent from $171 million.
The result was worse than market predictions of about $169 million, as cash earnings dipped by four per cent to $176 million.
Looking ahead, the bank expects a moderation in economic growth in the second half of its financial year.
"Consumer and business confidence continues to be weighed down by elevated inflation, increasing cash rates and uncertainty arising from the Middle East conflict," it said.
"It is expected that inflation concerns will lead to additional cash rate increases through the remainder of calendar year 2026."
Mr Finch acknowledged there was economic uncertainty ahead, but said the bank had "strong financial and operational resilience".
"BoQ is well-positioned to navigate the current conditions and support our customers and the broader economy," he said.
Bank of Queensland booked a loan impairment - or bad debts - expense of $20 million during its first half, up from $3 million for the same period previously.
The bank will pay a 20-cent dividend for the six months ended February 28, up from 18 cents last time.
Bank of Queensland shares were down 8.6 per cent to a three-month low of $6.645 in early afternoon trading on Wednesday.
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