Good day, and welcome to the BOQ market announcement. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. Instructions will be given at that time. As a reminder, this call may be recorded. I would like to turn the call over to Ms. Jessica Smith, General Manager of Investor Relations and Corporate Affairs. Please go ahead. Good morning, and thank you for joining BOQ's market update. My name is Jessica Smith, and I'm the General Manager for Investor Relations and Corporate Affairs at BOQ. I would firstly like to acknowledge the traditional custodians of the land on which we meet today, the Gadigal people of the Eora Nation. I pay my respects to elders, past and present. Our CEO, Patrick Allaway, will discuss on the call today the strategic announcements we have made to the ASX this morning. Also in the room is our CFO, Racheal Kellaway, Group Executive Retail Banking, Greg Boyle, and Group Executive Business Banking, Chris Screen. Following Patrick's address, there will be time for questions. Given the proximity to our financial results, we will limit questions and discussion today to those topics in the release only, and we will not discuss our upcoming financial results. I ask that you please consider this in your questions. I'll now hand over to Patrick. Thank you, Jess, and good morning, everyone. Thank you for taking the time to join us today. Today, BOQ has announced some key strategic decisions which will progress our transformation to a simpler, specialist, higher-returning bank. These changes represent a decisive step towards addressing our challenges in a bold, proactive way and will put BOQ on a sustainable path. As you know, recent market shifts to increasingly commoditized and lower returning retail banking have been more exacerbated for BOQ. At our half-year result, I said we'd be seeking to address margin compression and cost inflation through considering additional pathways to enhance shareholder returns. We've announced three initiatives today to fundamentally change the way we operate, reduce our cost to serve, and optimize return on capital. Firstly, we're converting our Owner-Manager branch network to corporate branches and ceasing the franchise model. Secondly, we're shifting our portfolio mix, recycling capital to higher returning segments, and leveraging our existing competitive advantage in business banking through accelerating the growth of our specialist business bank and finance company. Finally, we've commenced execution this week of additional productivity initiatives to increase our previously announced AUD 200 million dollar simplification program to AUD 250 million dollars. The strong progress we've made against our strategic pillars to strengthen, simplify, digitize, and optimize have enabled these announcements today. These initiatives will enhance returns with less reliance on margin recovery, allow scale at a lower cost, and uplift our customers' experience. I will go through each of them now in more detail. Firstly, changes to our branch operating structure. We recognize that our heritage retail banking operating model that has served us well in the past, is no longer sustainable in its current state in a lower returning environment. The significant progress made in BOQ's digital transformation is enabling BOQ to now simplify our retail distribution channels. Converting our 114 Owner-Manager Branches to corporate branches is a material change in the structure of our business and a further step towards transitioning to a simple, low cost to serve digital retail bank. This was a difficult decision, and we acknowledge with immense gratitude the important contribution of the Owner-Manager network to BOQ. We will be working closely with our Owner-Managers to support them through this process and ensure a seamless customer experience as branches convert, which we expect to complete by March 2025. Through this conversion, there will be employment opportunities for Owner-Managers and their staff. The conversion of our branch network going forward will provide greater flexibility in how we distribute our products, aligning our footprint with our digital and relationship banking model, allowing for potential consolidation as customer preferences continue to shift to digital channels. It will reduce origination, compliance, and head office support costs and provide the opportunity for any future margin optimization initiatives. Finally, it will enable group investment through the branch network, adding business bankers and growth corridors for our target specialist segments. We expect the cost of conversion will be in the range of AUD 115 million-AUD 125 million, which will be incurred in the second half of FY 2025. The capital impact on the group is expected to be approximately 30 basis points, with the conversion cost being amortized over four years, commencing in the second half of FY 2025. We're expecting an annual net cash profit after tax benefit of AUD 20 million from FY 2026, with further opportunity to optimize this performance going forward. This is the right decision in transforming BOQ to a lower cost, agile, digitally focused retail bank. With the decision to convert our branches, we can continue to leverage the growth of our digital bank and simplify our operating model. Satisfaction with BOQ's digital bank continues to increase as more customers embrace the enhanced experience on the digital platform. App Store ratings recorded further improvement, with 4.5 for myBOQ, 4.5 for ME Go, and 4.3 for Virgin Money Australia. We now have over 260,000 customers on the new digital banking platform and AUD 6.9 billion in deposits. 25% of retail customers are now served on BOQ's digital bank. Migration of ME customers to the digital bank has commenced, with full migration to be completed through FY 2025 as planned. We're also in the process of finalizing the migration pathway for BOQ customers, which will materially improve customer experience and provide significant cost saving to the group. The rollout of digital mortgages remains on track and will include a digital direct approach to the market in the second half of FY 2025. Moving now to the business bank. We're pivoting our revenue mix towards leveraging the strength of our higher-returning business bank and finance company. We've recently brought on ten new bankers and will make a material investment in additional bankers over the next two years to drive growth in specialist segments where we have an existing competitive advantage and strong relationships. These bankers will be focused on target industry sectors, including health, professional services, hospitality, and agriculture, supported by our unique finance company, offering across equipment finance, insurance premium funding, dealer finance, and novated leasing. The investment will be directed to growth corridors across the country, particularly focused on leveraging our 150 -year heritage and competitive advantage in supporting Queensland businesses. We placed a number of our bankers in our newly converted regional centers across these growth corridors. This shift and investment will expand the group's service capabilities and customer reach, recycle capital from low-returning assets to specialist high-value market segments. We note the competition in business banking is increasing. We're of the view that more defensive business relationship banking, combined with our specialist sector competitive strengths and finance company capability, will support sustainable margins. Thirdly, on simplification. We have progressed our productivity program throughout the half. We've identified that there is more we can do in simplifying our operating model and management structure. We know that customers are increasingly engaging with us through our digital channels, and we have had some large digitization projects coming to a close, which has enabled this reduction. We're continuing to identify additional cost-saving opportunities to deliver more sustainable returns, ensuring that BOQ can continue to provide a viable and valuable banking alternative to Australians. We've made the difficult decisions to commence the reduction of four hundred roles. These changes are separate to the branch conversion. We're working closely with the team members that have been impacted, providing the appropriate support through this process. A restructuring charge of AUD 25 million-AUD 35 million will be reflected in the FY 2024 financial statements. This will deliver an additional AUD 50 million in annual benefits to our existing AUD 200 million simplification program by FY 2026. Finally, I will close with some comments on our FY 2026 targets. I have been transparent with the market about BOQ's challenges and the significant industry margin erosion since these targets were set. The management team are acutely aware that our legacy, complexity, and relative higher cost of funding in the increased interest rate environment has exacerbated industry headwinds for BOQ, and our recent return on equity and cost-to-income levels are not sustainable. The assumptions which underpin the targets, which were set in 2022, have materially changed. The industry has experienced significant margin compression and elevated inflation, which has impacted returns. Today, we're announcing that we are restating our FY 2026 targets to an ROE of 8% and a CTI of 56% in FY 2026. Our announcement today is evidence of management's commitment to making the decisions that are needed to improve shareholder returns by repositioning BOQ to compete at a lower cost to serve in a more commoditized market and leverage our competitive strengths. We have not taken these decisions lightly. They are the right decisions to support the sustainability of the bank for our customers, people, and shareholders. We will continue to focus on controlling what we can control. We have a strong, well-secured portfolio, robust financial resilience, and are well progressed on delivering an end-to-end retail digital bank and growing our specialist business bank with a compelling customer proposition. I will now hand to Jess for questions. Thank you. Thank you, Patrick. We will now be taking questions. So that everyone on the call has the opportunity to ask questions, we will limit to two questions each, and I kindly remind you that we will not be answering questions regarding our FY 2024 financial result today. Operator, can we please have the first question? Our first question comes from John Storey with UBS. Your line is open. Thanks very much, and good morning, Patrick. Congratulations on the announcement this morning, in terms of simplifying the group. I think, First question I would have, just on the cost targets, I think certainly we're getting a lot of incoming questions on this. If you go and have a look at it, the OMB's operator cost to income ratio in terms of the data that you provided at 85%, 56% FY 2026, in terms of the pro formas, where you're at the moment, 70%. With the investment that you've outlined in terms of business banking, maybe if you could just give us a little bit more color and help us to try and bridge from the current 70%, where you are at the moment, to the 56% and the timeline that you've given. That would be my first question. Then the second question I would have is really just around some of your initiatives with regards to deposit funding within the business banking division. Obviously, you're doubling down in terms of your efforts there, but you know, one of the deficiencies, I think that you yourselves have called out, is really just deposit funding within the division. Maybe if you could just give us some of your thoughts and you know, what yourself and the board have thought about trying to close that relative funding gap within business banking. Thanks. Yeah. So thanks for your question, John. I think firstly on the CTI, obviously, there's two drivers of that. What we have said today is that we're investing significantly in our business bank, and we will accelerate the revenue growth being driven from the business bank and higher returns in that segment. In addition to that, we're taking further productivity initiatives in addition to the AUD 200 million we announced at the end of FY 2023. When you look at our cost base, we had previously said that FY 2026 costs would be flat on FY 2023, following and including amortization expense, propex and inflation. You should expect that cost base will now come down based on the announcement that we've said today. So, we're not gonna give you a forecast, obviously, and a roadmap to get to our CTI targets, but what we're saying to you today is that we are simplifying and digitizing our retail bank, which is lowering our cost to serve. The initiatives that we've announced today with respect to the OMB conversion as well, will provide us with further opportunity to reduce our costs and drive margin. And we are aggressing, we are accelerating the growth in our business bank, where we have a competitive advantage in specialized sectors. On the deposit funding, we think that's a really big opportunity for us. You know, clearly, a payments platform for the business bank is a key initiative as we think about investment for the business bank going forward. You know, we're working through that, but we see that as a large opportunity to continue to fund the growth of the bank. Great. Thanks very much. Thank you. Our next question comes from Jonathan Mott with Barrenjoey. Your line is open. Thank you, Patrick. I've got a question on closing the owner-managed branches, and it's kind of disappointing in a way, given for 25 years, this has really been a point of differentiation for BOQ. So for many people, it's a tough day. You're saying this is gonna be done by 2025, and I just wanted to get a feel for the process, 'cause it is gonna have an impact on many people and many customers. If we look at it, I assume that there's a clause in the contract that allows you to buy back the OMBs, but the economics don't look fantastic. It looks like it's around AUD 1 million per branch. And then I wanted to get a feel for the, i f there's a non-compete clause, 'cause I'm sure a lot of the small business owners who run these owner-managed branches are gonna be disappointed. You'd have to presume many of them are gonna go and become mortgage brokers and compete directly against you. So is there a non-compete clause to stop the OMB owners just going off and becoming brokers? And finally, what are your assumptions for customer attrition? Because a lot of customers have been loyal to the local owner-manager for many, many years, and you'd have to assume some of them are gonna be disappointed. So what are your assumptions around customer attrition for both mortgages and deposits in the OMB network? Thanks for your question, John. There's lots of questions, and then I'll try and cover them all. If I don't, maybe you can just give me a little prompt at the end. Look, I first wanted to start by saying this is a really difficult decision and a big decision for the bank. The owner-managers have served us very well since 2002, and this has been a unique proposition for BOQ. Markets have shifted on us, and that shift has accelerated, and the two big drivers for that is our customers are choosing to move to digital channels, and we're seeing that as a major consumer trend across the industry. But also, we've seen significant margin compression, and so the sustainability of the model, if margins don't recover, is very questionable in the current environment. But the owner-manager channel is one of our more expensive origination channels, and, you know, as we look at driving margin, you know, we recognize that the returns that we're getting through that channel are not sustainable. So we are making very difficult decisions. In the days of Rivers of Gold, when margins were higher, it was a very sustainable channel for us, but markets have shifted on us very quickly. So I think that's one just comment I'd like to make. In terms of the economics of the model, there are many reasons as to why we're doing this. It's not just the economics. But the model is driving a AUD 20 million net profit after tax in FY 2026. We do believe that we will be able to optimize that over time. So we will be taking on the cost base of the owner-manager model. We see an opportunity to run that more efficiently, and that would be an important opportunity for us to optimize returns. In addition to that, on the revenue line, as you will see in the pro forma, we pay out about AUD 125 million in FY 2024, going forward. So this will be margin accretive for us as those revenues come back onto an interest line as well. So the economics are strong, and from a compliance and control perspective, as you know, the regulatory environment changes, we're unable to pass those costs on to the owner-manager network. This will enable us to manage our compliance obligations, going forward as well. So there are many strategic reasons to do this. We have said consistently that we are moving our retail bank to a lower cost to serve digital bank, and that in a highly commoditized, lower margin retail market, unfortunately, the current operating model and structure is not sustainable for us. In terms of non-compete, we are offering employment opportunities to our owner-managers and to employees within that group. We do believe that many will convert to join BOQ. But you know, clearly, we have strong customer relationships. The customer service levels will remain seamless as we transform this network over the next six months to BOQ. Okay, thank you. And just a final part on that was, in your own assumptions, to get to the 8% return on equity, what customer attrition assumptions have you assumed, or have you assumed that the business continues to grow just in an E&A corporate structure? John, I'm not going to go into that today, but what I can tell you is we have assumed some runoff of our deposit books and mortgage books across that network. We've taken a fairly conservative approach in relation to that. But I think what I would also say to you, we are putting more bankers into key growth corridors to grow in sectors where we can compete and win, and in sectors where we're getting higher margins, particularly in Queensland. So we are going to be making a significant investment in Queensland. We see that as a material offset to the change and improving our return on equity as well as we recycle capital into higher returning sectors. Thank you. Thank you. Our next question comes from Matt Dunger with Bank of America. Your line is open. Yes, thank you for taking my questions, Patrick. On the OMB profitability, is it fair to assume there's a distribution of profitability across the branches? And what will the new footprint look like? How long is the tail of unprofitable branches? Is it 20%, you know, 30%? Matt, thanks for your question. I'm not going to comment on that. I don't think it's appropriate for me to talk about specific branches. Really, what we're saying to you today is this is a material shift in the way we operate to address structural changes in the marketplace, and this will drive improved returns for BOQ. Thanks, Patrick. And just to follow up, if I could, on the amortization period of four years, are you able to give us a sense as to what determines that? So look, that's, that's based on assumptions that we've made, today. That might change a little bit, but I don't think there'll be material changes to that. It is an accounting treatment as to how we're gonna allocate the amortization of the cost. Thank you. Our next question comes from Brian Johnson with MST. Your line is open. Patrick, well done on kind of addressing the elephant in the room, which I think must be very hard for a CEO to do. I had a few questions, if I may. The first one is 8%. You're doing about 5% at the moment, and there's kind of risk to get there. But I just wanted to flag to you how you'd respond to the fact that 8% probably doesn't equal your cost of capital. So at the moment, we've got bonds kind of sitting sub 4%, put on 5% equity risk premium, and kind of think about some kind of beta. You don't come to eight. Do you think eight is good enough, or ultimately, does this still suggest that you need some dramatic actions over and above this? So, Brian, this is a 2026 target that was set in 2022. We will be driving the transformation of the bank going forward. We are very ambitious about what we would like to achieve in our return on equity, and so, you know, 8% is a starting point for us in FY 2026. What we have said in the past is, you know, in time, we will decommission our whole Heritage Bank. That will drive a material productivity uplift for the organization. You know, we're also looking to really leverage the strength of our business bank and finance company, and to accelerate the growth of that entity. So, you know, FY 2026 is not far away now. The initiatives that we've announced today support the delivery of those numbers, based on the assumptions that we've made today and what we know about the market today. But we are very ambitious to continue to grow those returns and achieve higher returns for our shareholders. ... The second one, Patrick, is kind of like a weird accounting question. So below the line, you take this big expense. Okay, so it's expense below the line in the March twenty-five period. And then you're talking about amortizing it, but you've already expensed it. Could I just clarify that you're taking it below the line, it hits the capital then. By amortizing, you're talking about when you're physically paying out the cash. Could you just explain that? Yeah. So the capital charge is upfront. Capital impact. The capital charge is upfront, and that's, we're saying approximately 30 basis points. You know, that cost will be amortized over a four-year period, on the balance sheet. So from an earnings profile perspective, you should expect, the below-the-line adjustment amortized over four years. So, sorry, you can't. That's saying that you're booking it twice. You're saying that you're expensing it up front, and yet you're amortizing it over the time. Once y ou don't need to expense it twice, surely. Yeah. So, Brian, with respect, we're not expensing it up front. Yeah, we're taking the capital charge upfront. That will be released over the four-year period. From an expense perspective and a P&L perspective, which is different to the capital charge, you will see the statutory profits impacted on an amortized basis over the four-year period. Fantastic. Thank you. Thank you, Patrick. Thank you. Our next question comes from Ed Henning with CLSA. Your line is open. Thank you. I've got a couple of questions. Firstly, just on the, you know, in the near term, you think about the owner-managed branches and just talk about the revenue risk going through this transition period and the actual growth in your credit. What's going to drive them to continue to push loans, if they're not gonna get the full economic benefit, until this transition kinda goes through? And then, that one's the first one. I'll go on to the second one after. Thanks for that, Ed. So, the current agreement, franchise agreement which we have with the owner-managers, very much aligns them with us over the next six months. So the performance of that network over the next six months will be important in determining their final payout, as we go to March 2025. So they are very aligned with our interests from that perspective. Once we take control over the network, you know, we will be able to control revenues going forward from then and how we deal with customers and what we do. But, in addition to that, we will be employing many of them into the network to support the network going forward. I also just wanted to say that, you know, part of this is a growth story that we are investing, you know, very heavily in part of that network in business growth corridors across the country, but particularly in Queensland. So we see a very large revenue growth opportunity for us across our business bank and finance company in growth corridors, and we will be investing bankers into those centers, which we're currently unable to do at present. Sorry, do they currently get any trail commissions, obviously, on their book and stuff? Or that's what you're just gonna pay out essentially at the end, the value of their book? Yeah, so look, we have a pre-prescribed formula as part of this conversion, and that is determined by the size of their book and other factors that will be finalized at the end of the first half of the financial year in FY 2025. With that, with the staff that they employ, you don't have to give redundancy or anything to them. That would be then on the owner-manager branches themselves? That is correct. They do not take jobs. Yeah, okay. And then last one, just on the growth side, and can you just talk a little bit about their obviously, you know, pushing more business bankers in there, you know, can you talk about your risk tolerance and, you know, are you happy to, you know, potentially increase that a little bit to try and grow that, grow that book even, even further, to kind of stimulate growth? Yeah. So at the half year, we did discuss some changes that we've made, and I'll credit that risk appetite in the first half of FY 2024. You know, that is enabling the growth of our business bank. Going forward, we continue to review our risk settings and our appetite. You know, as you know, most of this book is secured, but we will continue to review risk-adjusted returns, and we'll make appropriate decisions as we continue to grow. Okay. Thank you, Patrick. Thank you. Our next question comes from Brendan Sproules with Citi. Your line is open. Good morning, Patrick. Thanks for taking our questions. I just have a question around the business bank and the initiatives that you've described in this release as being material. I do know you've hired 10 bankers. I was wondering if you can give an indication as to, you know, how material is 10 bankers to the current operations? And then secondly, how quickly can this process really deliver revenue and earnings growth, noting the last sort of two or three periods you've seen declining revenue and flat lending growth up until at least the end of the first half? Yeah. Look, Brendan, I'll give an update of the business bank performance at the full year results. I don't think it's appropriate for me to comment on the second half at this stage or the outlook, but you know, we are highly confident that the addition of the bankers that we have brought on are driving strong pipelines. And you know, we are confident that we can grow in the specialist segments where we actually can differentiate, compete, and win, but particularly leveraging our Queensland advantage. So we will be allocating more capital to Queensland, we'll be investing people in Queensland, and we're very excited about the growth opportunity that gives us. Thank you. Our next question comes from Andrew Triggs with JP Morgan. Your line is open. Thank you. Good morning, Patrick. My first question, just on the change in the OMB strategy. I mean, for a long time, you've been de-emphasizing the corporate channel and priority of the OMB network, and the argument there has been that the corporate channel is far less productive than the OMBs. What's changed there? 'Cause to me, this looks like a cost decision rather than a franchise and revenue decision. Yeah. So, Andrew, I don't think we've de-emphasized the corporate channel. Going forward, what we have said is that our core model, and it has been since two thousand and two, was an owner-manager model, and we were very committed to that model. You know, we have said that our customers are increasingly shifting to digital channels. We have also said that the model, in terms of margin compression, that we've seen through more commoditized retail markets, is requiring us to move to a lower cost to serve, and the model is expensive for us, going forward. And in addition to that, we've got increased compliance costs. So there are material changes that basically have been persistent over the last 18 months or so. We've taken the view that the margin compression is not recovering, and a model that served us very well, in the past is not sustainable for us going forward. Sorry, Patrick, I meant that, you know, in recent years, you've de-emphasized corporate in favor of OMB branches. You can see the mix has shifted quite dramatically over the last three years. My question is really, what has changed on your confidence of productivity within the corporate branches? 'Cause clearly that was behind the decision to shrink the corporate branch network over the last three to five years. That, that's correct, so look, I think that strategy was commenced about three years ago in a very different margin environment from where it was today, so we've seen a significant shift in margins, and in a lower returning market, this is a higher cost to serve channel for us, so I think that's a significant change. I think the other important aspect of this is as we think about our portfolio and where we're getting returns in our portfolio across our balance sheet, we are shifting our portfolio mix to emphasize the strength of our business bank and leveraging the strength of our business bank and finance company, and a corporate model enables us to invest in those channels, in growth corridors and regions where we do see big opportunities. That's a material shift as well, because we have recognized over the last couple of years that return on equity is not sustainable, so we are making decisions today, one, to fundamentally change the way we operate, to lower our cost to serve, but two, to shift our portfolio to higher returning assets and segments where we have a competitive advantage and can compete and win. And just on the size of the network, as the OMBs are converted to corporate branches, will the overall size of the network continue to decline, do you think? Look, our customers are increasingly choosing to interact digitally with us, so you should expect future consolidation of the network. You know, we will evaluate that over time. Thanks, Patrick. And just maybe a second question around the FTE reductions flagged. There's very little detail provided on where they'll be coming from. Could you give us a bit more context? They are very large numbers. Yeah. So where, where are they coming from, and what's the net, net impact? 'Cause the previous 250-odd heads that you took out didn't really drop through to the bottom line, given addition of staff in, or heads in, other areas. Yeah. So thanks for that question, Andrew. Look, I just wanted to start by saying these are very difficult decisions for our people. You know, we recognize that, and we don't make these decisions lightly, and we will support our people through this process. But it's important that we structure our organization to ensure the sustainability of the bank for our customers, people, and shareholders. So I just wanted to emphasize that point, that you know, we are considering the impact on our people, and these are very difficult decisions that we're making. In terms of where they're coming from, as I said earlier, you know, many of our big technology projects are now past the peak investment stage, and many have been delivered. So there are people coming out of technology, from that perspective. But as we continue to digitize, and simplify our retail bank operations, you are seeing people come out of retail banking, but also that digitization and efficiency and automation is driving people out of operations as well. So, you know, those are the sort of three key areas in the bank. I think, what I would like to emphasize, though, is whilst, there are people coming out from those, sectors, we are investing in the business as well, in the business bank. We are also shaping the skills and capability of our people to ensure that we are future fit for our future state operating model. So, you know, you would have seen. In the first half, which we called out, but at the end of last year, there were about 220 roles that came out. We have reinvested in parts of our business, in particular our contact center, as we continue to digitize the business and provide customer support from a contact center. We've invested in some of our projects, which I said these are now starting to come off, and we've invested in the business bank as well. But there will be a net reduction in people in FY 2025 as a result of these decisions. Thank you. Thank you. Our next question comes from Azib Khan with E&P. Your line is open. Thank you very much. Patrick, if I go back to the FY 2026 targets you laid out in April as part of the interim results, you had mentioned back then that you were targeting FTE reduction greater than four hundred by FY 26. Today, you've announced four hundred, but if I reconcile that with what was said in April, does that mean there's more to come, or has there been a revision in plans there? So look, as we've said, we've added to our productivity initiative, Azib, so thank you for the question. You know, in we earlier, at the end of FY 2023, announced a AUD 200 million dollar productivity program, which included an additional greater than 400 people, which we has previously announced to come up by FY 2026. As we continue to decommission our heritage legacy systems, you would expect that we can drive more efficiency through the organization. So as part of our digitization program, but also our simplification program, you know, you would expect that we will continue to drive efficiency through our operating model to ensure that we're future fit. So the announcements that we've made today are in addition to the AUD 200 million productivity program that we made and the comments that we made at the half of this year. Sorry, just to be clear on that, Patrick. So, the 400 announced today is in addition to the greater than 400 announced previously? It's an additional productivity initiative reflecting the environment we're currently operating in. As we continue to migrate customers off our legacy platforms and deliver digital mortgage, mortgages, we expect that there will be more efficiencies through FY 2025 into 2026. Okay. And just another question, if I may. You've mentioned you'll be looking to recycle capital away from lower returning segments to the higher returning business banking segments. Does that comment specifically apply to just within the business bank, a reallocation of capital within the business bank? Or does that also refer to allocating capital away from home lending to business lending? So look, you would have seen over the last results that you know we have had run off in our mortgage book, and we've said we have no interest in running business below our cost of capital, so you know we are seeing the opportunity to recycle that capital into growth segments that are giving us appropriate returns and higher returns in segments where we can compete and win. The announcement we've made today is accelerating the growth of our business bank and finance company, so we will continue to look for opportunities to recycle lower returning capital on our balance sheet to higher returning segments while ensuring that we still have the appropriate balance within our risk appetite on the balance sheet. Thank you. Thank you. Our next question comes from Richard Wiles with Morgan Stanley. Your line is open. Good morning, Patrick. A couple of questions. Firstly, on the Owner-Manager conversion, you've outlined that you won't have to pay the commissions going forward, and you've also outlined that the OMBs are a lower, a higher cost network. I'm wondering if you could tell us about the gross revenues of the OMBs. Are they higher, or is it a more productive network than your corporate branches from a revenue, from a gross revenue perspective? So, Richard, you would have seen in our recent results that, you know, our retail bank has been in decline, and, you know, that's across the channels. We did call out at the half year that the only part of the retail bank that was growing was Me Bank through our broker channel and Me, because that was a lower cost to serve. So, you know, this channel has been in decline. We see an opportunity to optimize the channel to return it to growth in key sectors through the addition of business bankers into key growth corridors. And so, you know, this gives us the opportunity to take direct control over where we wanna grow, how we want to allocate our capital, and segments where we're not getting appropriate returns on our capital. This will be NIM accretive to us. This is an important focus for us on ensuring that we can drive margin improvement in a very, very difficult operating environment. Okay, and my second question relates to the current trends. I understand you want to limit questions to today's announcement, so I won't ask you about specific trends, but it is five months into the current half. It's four months since you've spoken publicly to the market. You've chosen the timing of today's announcement, and I think if you don't comment on the current trading performance, then investors will quite rightly assume that your cash profit is tracking towards the consensus estimate. That's about AUD 325 million for the full year, so is it right for investors to assume, because you're not commenting on it, that you are comfortable with consensus? Richard, I won't speculate on what investors are assuming. You know, but what I will say is that we're not gonna give an update on FY 2024 guidance, today. If we did have anything to disclose, we would disclose it. Obviously, we've got continuous disclosure obligations. But I will leave that to you, in relation to your assumptions. Okay. Thank you, Patrick. Thank you. The last question today comes from Matthew Wilson with Jefferies. Your line is open. Yeah, good morning, Patrick and team. Matthew Wilson, Jefferies. Can you hear me okay? I can hear you well. Thanks, Matthew. Thanks. Why are you choosing to characterize the transaction as non-cash? Presumably, you're gonna pay a check out to each of these entrepreneurs that have run the owner-manager branches, and will there be a dispute process with respect to valuation? I also have a second question. Yes, so thanks, Matthew. We're not saying it's non-cash. You know, there will be a cash outflow. What we're saying is this is an acquisition, so we're treating the acquisition cost below the line. It's not part of our cash earnings, that we basically reflect our underlying earnings. So that's the only difference. It does impact cash, but, it's a one-off below-the-line cost, treated as an acquisition. Sorry, what was your second question, Matthew? Will there be a dispute process with respect to valuation? I imagine some of the entrepreneurs will have a different view of valuation than you do, as is customary in market practice. We've got a very clear formula in our franchise agreements, so we don't anticipate any disputes in relation to that, but you know, we will be complying with our contractual obligations and operating appropriately to support our owner-managers through this difficult process for them. Okay. And then secondly, you know, you talk about your business bank and pivoting towards it. Now, could you, you know, give the market color on what do you think your competitive advantages are in the business bank? You know, you mentioned the word competitive advantage a couple of times in the release. What actually are they? So look, there's a couple. First of all, we have a very unique finance company. You know, many of our peers do not have a finance company, so that enables us to cross-sell the capability of that finance company into the businesses that we're serving. Those margins are higher in the finance company as well, and so we think that's a strong differentiation for us that we will continue to grow. In terms of our business bank itself, as you know, we specialize in sectors, and we've got outstanding bankers who provide significant value in the sectors that we specialize in. Our bankers are not generalists. They're industry experts, and we're adding significant value to our customers in those segments, and in many of those segments, we dominate. And for a small bank, that's quite unique. That's important. I think the third one, just to call out, is our Queensland heritage. You know, we celebrate our hundred and fifty-year anniversary this year in Queensland. We have a very strong competitive strength in Queensland with long-standing Queensland customers, and we intend to leverage that and take advantage of that. Just a follow-up on the finance company, you don't have any real competitors because they've all closed down their finance companies for various reasons. You know, why do you think your view of the economics of a finance company differs to that of, you know, the major bank peers, Macquarie and others? Look, there are not scale opportunities for those other banks. You know, we're a small bank. The finance company is a material contributor to our profits and earnings, and it's a very important part of our customer service proposition. And it also provides us with an opportunity to compete against many who have a higher cost of capital than us, which is quite unique, and so we see it as a very important part of our customer proposition. If I could try my luck, just finally, on one more. You know, you talk about the acquisition in pre-tax terms. Can you talk about the taxation implications of the corporatization? I would have thought it's a capital transaction, not an expense. Yeah, it is a capital transaction, but I'm not gonna go into tax details, but you know, you can basically assume tax rates that would be appropriate for BOQ. But, but it shouldn't be tax-deductible, no? I'm gonna pass to Rachel on that question. Hi, there. So the capital outlay up front is the cash payment to our owner-managers. From there. And that's the 30 basis points of capital that we've called out. That's not the accounting treatment, that's the capital treatment. From an accounting perspective, as Patrick has called out, this is an acquisition, so it creates an intangible asset. As that acquisition unwinds and amortizes through the P&L, the normal corporate tax rate is applied to that, and so there is a tax effect as it unwinds. Thanks, Racheal. Okay. Thank you. Thank you. At this time, I'd like to turn the call back over to Jessica Smith for closing remarks. Great. Thank you, and thank you, Patrick. Thanks to everybody on the call and for your questions. That brings us to the end of today's briefing, and we thank you again for joining us this morning.