Bank of Queensland CEO Jon Sutton said the company needs to take a $15m hit to earnings in 2016 to become more efficient. The decision will offset a margin squeeze from funding cost jumps, and cover the cost of 50 job losses.

In a report by Fairfax Media, Sutton said the $15m would help remove duplication and manual processes, and downsize BOQ’s cost-to-income ratio into the low 40 percent range. Part of the sum will also be used to pay out 50 redundancies within its 2200 staff.

"Job losses are minimal. There are some 2200 staff in BOQ. Since we bought BOQ Specialist we have expanded that by about 100," Sutton said.

Some analysts believe the decision is largely aimed at offsetting higher funding costs and heavy competition in the mortgage market. This is the second time Sutton has flagged that margins have been affected by increased costs and competition.

However, the CEO said it’s all part of running operations better in the face of uncertainty in funding markets.

"We have been through a tremendous period of growth through the last couple of years. Banks are operating in a very different operating environment at the moment and any business should be looking at ways to improve the way they operate,” he said.

"The uncertainty in the global economic outlook over recent months has resulted in a significant increase in volatility in funding markets.

"While strong competition for new business remains, this creates headwinds for our margin outlook."

Most of the spending is said to occur the second half of its 2016 financial year, but it will also cut into BOQ's half-yearly results, due on April 7. BOQ operates owned franchise across Australia.