Bank of Queensland : S&P Lowers Long Term Credit Rating for BOQ

Bank of Queensland Limited ABN 32 009 656 740

100 Skyring Terrace, Newstead 4006

GPO Box 898, Brisbane 4001

Telephone (07) 3212 3333

Facsimile (07) 3212 3409

www.boq.com.au

22 May 2017

Bank of Queensland (ASX: BOQ) acknowledges Standard & Poor's (S&P) decision to lower its long-term issuer credit rating to 'BBB+' from 'A-', as part of a downgrade of ratings on 23 Australian financial institutions. The outlook is 'stable'.

S&P's decision is based on its view that continued build-up of economic imbalances in the country over the past few years due to a rapid rise in private sector debt and house prices, particularly in Sydney and Melbourne, has exposed Australian financial institutions to greater economic risks. We note that BOQ has a significantly lower level of exposure to the Sydney and Melbourne property markets than many other industry participants.

In the announcement, S&P also noted that despite its view that the risk of a downside scenario and its impact have increased, S&P considers the outlook for the Australian banks remains relatively benign by global standards.

BOQ also notes that the long-term issuer credit ratings of the four major Australian banks remain unchanged, reflecting S&P's expectation of likely timely financial support from the Australian government for these institutions. In effect, this means that the 2 notches of government support for these institutions has increased to 3 notches of benefit.

There was no change to BOQ's short-term rating, which was affirmed at 'A-2'.

Tracy Hicks, Head of Corporate Affairs

T: 0439 540 960 E: tracy.hicks@boq.com.au

Daniel Ryan, Head of Investor Relations

T: 07 3212 3990 E: Daniel.ryan@boq.com.au

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