Bank of Queensland is optimistic about growth and plans to convert more of its corporate stores to franchise status or owner managed branches (OMBs).

AustraliaÍs seventh largest lender just cut its interim dividend but expects to see improvements in the second half of 2009 thanks to lower cost funding and re-pricing strategies.

Managing director David Liddy said ñWe have maintained sound asset quality in a challenging economic environment and with, in my view, the most effective retail banking distribution platform in Australia, we are well placed to continue to grow.î

Liddy said the results demonstrate the distribution power of the owner-managed branch model and an ability to re-align the model, moving from loan growth to deposit gathering.

As part of an organisational review and restructure to make significant savings the bank earlier this year merged the retail and business sectors into one banking group. NSW branches will be reduced from 56 to about 45.

We will also focus on strengthening the continuing OMBs and converting corporate branches to OMBs in Queensland and WA. The unique OMB model provides exceptional growth over the corporate model,î said Liddy.

There are 281 branches of which 205 are owner-managed. Figures show a five per cent annualised growth in assets six months before conversion to owner-management becomes a 31 percent growth a year later; deposits increase from 14 percent to 45 percent over the same period.