Bank of Queensland shares lift amid ‘steady progress’, FY25 earnings meet expectations
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More news: Bank of Queensland shares lifted in morning trade after the bank’s full-year earnings were largely in line with expectations and showed “steady progress on reshaping the overall franchise”, according to UBS analyst John Storey.
At 10:41am AEDT, shares in Bank of Queensland had lifted 4.2% to $7.42.
The context: Total income came in at $864 million, above market consensus estimate of $858 million, while net interest income of $790 million was in line with the consensus of $787 million. Non-interest income came in at $74 million, above consensus of $71 million.
UBS analyst John Storey said that the second-half results for the bank “show steady improvements”.
What they said: “It is clear BOQ is shifting toward a more focused and streamlined organisation, remoulded into areas it can compete given its smaller scale and higher per unit economics,” the UBS research note said.
“We like the progress of the retail bank digital strategy, while continued growth in business banking is helping group profitability. We could imagine BOQ, in time, being a potentially smaller, yet more profitable business albeit battling to close the gap between cost of equity and return metrics.”
Bank of Queensland posts 53% slide in full-year profit
The news: Bank of Queensland has reported a 53% drop in statutory net profit after tax for the full year to August, dragged down by a $170 million goodwill impairment flagged earlier this month.
The numbers: BOQ recorded statutory NPAT of $133 million. The year-on-year decline was attributed to one-off items including the $170 million goodwill impairment in its retail bank, $43 million in branch strategy costs, $23 million in restructuring costs as a result of operating model simplification, and $14 million for remedial action plans.
Cash earnings after tax were up 12% year on year to $383 million, driven by 4% growth in revenue. Net interest margin was 1.64% for FY25, up 8 basis points on FY24 and 13 basis points half over half.
BOQ will pay a second-half dividend of 20 cents per share, up from 18 cents per share in the first half.
The context: BOQ said it "remains optimistic about the longer-term view", though elevated competition for housing lending and quality business lending is expected to continue into FY26.
The bank's mortgage book is set to experience a "modest decline", it said, as the group prioritises higher returning business lending.
BOQ also outlined risks to the margin outlook driven by the uncertainty of the depth and timing of cash rate movements, as well as a heightened competitive environment for lending and deposits.
What they said: "We've seen encouraging momentum across our core businesses with strong growth in business lending and have expanded our proprietary acquisition channels," said managing director and CEO Patrick Allaway.
"We continue to invest in bankers and technology, improving our customer relationships and digital banking experience."
The source: ASX
