BOQ jumps after beating earnings expectations
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More news: Bank of Queensland shares rose 6.8% to $6.195 in early trading on the ASX after it posted its half-year results.
Despite the bank’s cash earnings falling 33%, it beat consensus expectations of a 37% drop.
BOQ posts earnings drop and cuts dividend
The news: Bank of Queensland (BOQ) has posted an earnings drop in its half-year results, citing as reasons the sale of its New Zealand asset portfolio, competitive pressures, and a contraction in lending and inflation.
The numbers: The bank’s cash earnings after tax fell 33% year on year to $172 millionduring the first half of the financial year.
Total income fell 12% to $795 million, driven by lower margins due to competitive pressures and a contraction in lending, while expenses increased 6% due to inflation and continued investment in risk, compliance and technology.
Its net interest margin fell 24 basis points to 1.55%.
The board determined to pay an interim fully franked dividend of 17 cents per share, which was 15% lower year on year.
However, its statutory net profit rose 3,675% to $151 million, which included the sale of its New Zealand asset portfolio. However, there were significant costs in the previous corresponding period, including a goodwill impairment, ME Bank integration and remedial action plan costs. The plan was in relation to the bank’s past risk management and risk culture weaknesses.
Context: The bank’s managing director and CEO Patrick Allaway said the results were impacted by continuing industry headwinds, along with heightened competition for lending and deposits and higher funding costs.
The bank noted it anticipated revenue and margin pressures to moderate during the second half.
What they said: “Pleasingly, in a reduced revenue and high inflation environment, we have held business as usual cost growth at just 1.2% in the half,” Allaway said.
“We have made a good start to our simplification productivity agenda and have agreed remedial action plans with our regulators, to continue strengthening the bank.
“Our digital transformation is progressing on plan. We have built and tested both our digital mortgage and legacy migrating infrastructure, with these key milestones moving to delivery stage in the second half.”
The sources: ASX announcement, Citi research
