BUSINESS BOQ defies profit slump
BANK of Queensland’s fullyear profit has slipped 5 per cent to $ 336 million, but shares are higher following the lender’s decrease in faulty loans, and plans to sell its life insurance division St Andrews to under- fire firm Freedom.
BOQ cash earnings for the year to August 31, which strips out amortisation of certain items and costs, were down 2 per cent to $ 372 million, while the lender’s loan impairment expense was down 15 per cent to $ 41 million.
Chief executive Jon Sutton was buoyant about its underly- ing revenue growth of 2 per cent to $ 1.1 billion considering the “difficult environment” created by allegations exposed in the banking royal commission.
“There is no doubt 2018 has been a tough year for the banking sector,” he said.
“Public scrutiny, regulatory change, flowing credit growth and changing customer expectations have all had an impact.”
Mr Sutton said this rise in underlying revenue was aided by an increase in lending and an improved net interest margin of five basis points.
“We have managed for the environment we are faced with, prioritising margin over growth,” Mr Sutton said. The inquiry into the banks, combined with the declining housing market, would put a dent in the lending industry.
“The economic landscape is changing,” Mr Sutton said.
“Slower housing credit growth, lower house prices, and stagnant wage growth will have an impact on revenue across the industry.”
The regional lender revealed in its full- year results it had spent $ 9 million on the royal commission and other regulatory matters so far.
BOQ also said it was moving ahead with the sale of its life insurance division St Andrews to under- fire insurance firm Freedom, and had factored in the $ 65 million sale despite the deal requiring regulatory approval.
It will declare a flat final dividend of 38 cents, fully franked. BOQ shares were up 2.2 per cent to $ 11.01 yesterday.