Bad debt concern hits BoQ

BANK of Queensland shares dived more than 7 percent after the regional lender flagged loan impairment expenses of $175m before tax for 2020, based on new modelling that paints a bleaker picture of the long path out of the corona virus crisis.

The bulk of the bad debt provisions – $133m – relate to CO VID-19,BoQ said. That figure is nearly double the $71 m it was provisioning for just two months ago.

The updated numbers are based on fresh modelling of RBA data, its customers on the bank relief package and their likelihood of recovery, as well as a significant exposure review. BoQ shares slumped 7.2 percent to $5.89 following the update. “The revised provision reflects the anticipated lifetime losses on the current portfolio relating to the impacts of COVID 19,” BoQ chief executive George Frazis said.

As at August 31, 12 per cent of the bank’s home loan borrowers and 16 per cent of its small and medium enterprise customers were on its relief package, with 25 per cent of those making full or partial repayments, BoQ said.

BoQ also has become the latest big employer to admit to under paying staff.

The lender said it would take an $11m pre taxex pen sein the full-year result following a review of past employee pay and entitlements. It has already made superannuation paymentstoth eAT O as part of the Superannuation Guarantee Amnesty in the amount of $2.4m and said it would complete a broader review for enterprise agreement employees and will pay theo wed money, it told share holders.

“We will get this right and we will make sure our people, past and present receive every cent they are owed ,” Mr Fraziss aid.