BoQ HY cash earnings dip 8% to $167m

Bank of Queensland has cut its payout after first-half cash earnings slipped eight per cent to $167 million as it grapples with challenges facing its retail bank and headwinds from the royal commission.

The regional lender said its cash profit for the six months to February 28 had fallen from $182 million a year ago, while statutory net profit after tax decreased by ten per cent to $156 million.

Its net interest margin – the difference between the interest it earns from loans and what it pays to fund them – fell by three basis points from the prior half to 1.94 per cent.

Shares in the company dipped 30 cents, or 3.19 per cent, to $9.11 at 1015 AEST on Thursday.

BOQ Interim chief executive officer Anthony Rose said the bank expected to incur higher costs from new regulatory obligations, while admitting there was “significant room for improvement” at its retail bank.

“Our lending processes, digital platforms and the ability to attract new owner managers in an environment of regulatory uncertainty, have hampered customer acquisition and returns,” Mr Rose said.

BOQ had flagged a $12 million earnings downgrade in February as it faces downward pressure for fees, trading and insurance.

Mr Rose said the bank’s second half earnings were unlikely to improve from the 1H19 level.

“Although the current earnings profile is not at the level that we aspire to, there is a lot to be optimistic about in terms of the progress made through the niche strategy, Virgin Money Australia, and the opportunity of reinvigorating the retail banking business in the coming 12 months,” Mr Rose said.

The lender cut its interim dividend by four cents to 34 cents per share, fully franked.

BOQ shares have slipped more than 15 per cent from $10.99 a year ago.


* First-half cash earnings down 8pct to $167m

* Statutory net profit down 10pct to $156m

* Interim dividend 34 cents per share, fully franked, down from 38 cents a year ago


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