Bank of Queensland’s full-year earnings fell 14 per cent to $320 million and chief executive George Frazis has flagged another drop in the year ahead as costs and investment rise.
The regional lender cited lower rates and a drop in demand for housing credit as cash profit for the 12 months to September 30 dropped from $372 million a year earlier, with net profit falling 11 per cent to $298 million.
Operating expenses rose by four per cent due to increased regulatory and compliance requirements.
Former Westpac executive Mr Frazis, who took charge in September, said on Thursday his first full year as boss is set to be difficult.
“We expect lower year-on-year cash earnings in FY20 with revenue and impairment outcomes in line with FY19, higher post-Hayne regulatory and compliance costs, and increased operating expenses related to our investment in technology,” Mr Frazis said.
The bank is investing a $30 million in launching a new Virgin Money digital bank next year.
“This is an investment in a long term value creation for this iconic brand, which has demonstrated success in attracting customers across its existing product suite,” the bank said.
“It is also anticipated that this investment in a new digital banking platform will be leveraged across the group in the years ahead.”
The bank declared a fully franked 31 cent final dividend, down from 38 cents in the prior corresponding period.
At 1028 AEDT, Bank of Queensland shares were down 4.3 per cent to $9.24.
BANK OF QUEENSLAND’S ‘DISAPPOINTING YEAR’
* Total income up 2pct to $1.09b
* Net profit down 11pct to $298m
* Fully franked final dividend down 7 cents to 38 cents