Bank of Queensland (BOQ) has raised $750 million in an government-guaranteed domestic bond issue that was three times oversubscribed from the $500 million sought originally.

The regional bank says proceeds from the bond issue would be greater if there was a uniform fee for access to the government guarantee for bank fund raising.

BOQ's fixed and floating rate bond issue was oversubscribed by 40 domestic institutions that took part. It matures in October 2012 and was priced at 65 basis points over the bank bill swap rate, a BOQ spokeswoman said.

Chief executive David Liddy said the strong investor interest demonstrated BOQ's credit standing in the debt markets and was an improvement from the bank's most recent bond issue in January which raised $500 million at 115 basis points.

Mr Liddy said BOQ's costs would be lower if all banks were charged a uniform fee for access to the government guarantee regardless of their credit rating.

BOQ has a long-term credit rating of BBB+ from Standard & Poor's and pays 150 basis points compared to the 70 basis point charge faced by the big four AA-rated banks.

"So you're 80 basis points off the mark before you even start," Mr Liddy told AAP.

"Now you've got to try, in terms of shareholder wealth, to get that back somehow."

BOQ will make a submission to the Senate inquiry relating to the wholesale and retail funding guarantee.

"I'm quietly confident that we'll see some change," he said.

International bond issues cost BOQ even more, with offshore investors charging another 35 basis points to account for the bank's lower credit rating.

"The cost of funds is still a continuing issue, but the access to funds has improved," Mr Liddy said.

BOQ plans to raise around $2 billion in wholesale term funding during 2009/10, he said.

The bank now raises 49 per cent of its total funding requirement from retail deposits, 20 per cent from securitisation, 13 per cent from term debt, 13 per cent from short term wholesale debt markets and the remaining five per cent from equity.

BOQ reiterated its 2009 profit guidance last Thursday, saying it is expecting to post up to a 25 per cent rise in its full year 2009 cash net profit to around $179 million.

Regional banks also face higher fees than the majors for access to the government guarantee on retail deposits.

For deposits over $1 million a fee of 1.5 per cent is charged to institutions carrying a long term credit rating below A.

By contrast, the AA-rated big four pay 0.7 per cent.

Global accounting firm KPMG says the higher fee applies to two of the three regional banks, all building societies and credit unions, making it more expensive for them to attract large cash deposits.

First half 2009 after tax profits across the regional banks declined by 68 per cent, while credit unions saw their profits drop by 30 per cent, and building societies by four per cent, KPMG said.