A wind back of questionable lending practices by major banks is producing a turnaround in home loan flows for Bank of Queensland. The bank's caution lies behind a fall in profit over the half year to February 2017. It's placing a lot of faith in its subsidiary brand Virgin Money to sustain recent momentum, much of it since the bank's half year end at February 2017.Net profit for the bank fell six per cent to A$161 million over the half compared with the half year to February 2016. The profit was four per cent down on the half to August 2016."Competition in the mortgage market has abated [thanks to] the behaviour of our peers," Jon Sutton, managing director of BOQ said yesterday, early in a presentation peppered with references to the comparative conduct of his bank versus that of the major banks."There has been a lot of regulatory focus on serviceability calculator," Sutton said, in reference to APRA."It's fair to say we have benefited from the approach across the industry."We found we were willing to lend a lower [maximum] amount in Sydney and Melbourne, so found ourselves off the radar."Sutton said the "increase in [home loan] applications" - which surged over the last six weeks - "reflects peers bringing their standards more into line with ours."Even though it's been a tough environment, we are at a turning point," he said.The interest margin at BOQ fell for a second half in a row to 1.85 per cent, down five basis points over six months and down 12 bps over 12 months.Anthony Rose, BOQ's chief financial officer, said the bank was looking for a lift in margin to around the 1.90 per cent level over the second half.Sutton said BOQ had plenty of room under APRA's cap on growth in investor lending, with demand for this product ticking up, especially in recent days as investors considered funder options in the context of major banks hiking their rates on investment loans.Investment loans accounted for 30 per cent of new lending at BOQ in the latest half, down from 44 per cent a year ago.The bank, which is rationalising its branded branch network, is pleased with demand for new lending through this channel, which is in excess of budget, as well as with improved broker engagement with BOQ product.The bank is prioritising investment in its Virgin Money brand, winning traction with brokers and also excelling in credit card balance growth.BOQ will soon roll out its first deposit product under Virgin Money branding."You'll see a lot more red," Sutton said.