BOQ says loan impairment to increase, reaffirms FY outlook
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The news: Bank of Queensland has reaffirmed its full-year cost and revenue outlook but says it expects its loan impairment expense to increase, reflecting higher interest rates.
The numbers: The lender said it is focusing on capital management within its target ratio of 10.25% to 10.75%, while dividends are also expected to be paid within the target ratio of 60% to 75% of cash earnings after tax.
Shares in the company are up 0.6% to $6.94 in early trading on the ASX.
The context: Bank of Queensland flagged an uncertain outlook for the economy next year, with the potential for improvement as interest rates ease.
Its chief executive Patrick Allaway is more positive on the growth outlook for Queensland over the next few years and told shareholders at the company’s annual general meeting it is boosting its banker numbers in anticipation.
It is targeting broadly flat total cost growth in FY25 and an uplift in revenues from its business bank and the owner manager conversion in the second half.
However, the lender expects its loan impairment expenses to increase, reflecting the higher interest rate cycle and higher rates for longer.
The source: ASX announcement
