S&P Global Ratings has affirmed its A- long-term issuer credit rating and A-2 short-term issuer credit rating on Bank of Queensland, citing the successful execution of its expanded distribution strategy over the past few years as a major reason.The business momentum generated has helped the bank expand its presence outside its home state of Queensland, said S&P in a note yesterday. "As a result, we have revised upward our assessment of BoQ's business position." "At the same time, we have also revised downward our assessment of BoQ's capital and earnings, reflecting our view that the bank will manage its risk-adjusted capital ratio at a strong but lower level than we previously thought."The stable outlook reflects BoQ's defendable business position in the highly competitive Australian retail banking market, the resolution of its past business challenges, its strong capitalisation, and our expectation that future credit losses will remain modest," observed S&P."Our ratings on BoQ reflect the bank's improved business position, strong capitalisation, and enhanced asset quality to a level now consistent with peers," said S&P.Over the last two years, the bank has "delivered sustainable loan growth," both organically and supported in part by its acquisition of BoQ Specialist. The business position upgrade is characterised by the bank's return to system-level loan growth as well as improved deposit growth over the last six months in particular, the rating agency noted, adding that these outcomes were "reflective of the continued successful rollout of BoQ's multichannel distribution strategy, which has generated business momentum and increased new business volumes per channel, including the expansion of the bank outside of its home state of Queensland."At the same time, BoQ has maintained its earnings metrics in line with its regional bank peers. "Overall, we view the rating appropriately reflects the strengthening of the bank's business position over recent years and the stability of its business [in the near future].""This business strengthening has not led to an upgrade due to the offsetting impact of our view that the bank will manage its risk-adjusted capital (RAC) ratio at a strong but lower level than we previously thought. As a result, we have revised downward our assessment of BoQ's capital and earnings."