BOQ boss orders new look as profit drops
BANK of Queensland has warned it will need to cut costs and streamline lending approvals to stay competitive after reporting a drop in annual profit.
The Brisbane-based bank said net profit declined 11 per cent to $298 million.
Earnings per share dropped 16 per cent to 79.6¢ in what it called a “disappointing” full-year performance.
BOQ managing director George Frazis, who joined the bank last month, said he would undertake a complete review of the business, including its “onerous lending practices” and lagging digital offerings. The review will be completed by February.
“Clearly these are disappointing results and we need to bring about a change in our culture and the way we do business,” Mr Frazis said.
“We will need to move quickly for the company to reach sustainable growth. We have a clear mandate to act to improve our performance.”
He said there was a need to simplify the bank’s retail and business lending operations to boost productivity.
“We have far too many products and my sense is we will halve the number of these products,” said Mr Frazis, who was a senior executive at NAB and Westpac before joining BOQ.
“It takes too long to go through the loan processes and some of the players leading in this area work on a much shorter time frame.”
He said that while he was attracted to the community culture at BOQ, there was a need to reduce bureaucracy and unnecessary procedures.
He said BOQ also needed to address the digital gap that had emerged between it and its competitors.
BOQ will invest $30 million in its Virgin Money digital bank as it moves to beef up its digital offering.
Mr Frazis said the bank was operating in challenging times but it “remained fundamentally a good business” in an environment of declining interest rates and increasing competition.
Both consumer confidence and business conditions were weaker with the slowing global economy and trade wars adding to uncertainty, he said.
BOQ will pay a final dividend of 38¢ a share, down 7¢.
Its shares fell 2.4 per cent to $9.42 yesterday.