Bank Of Queensland Releases 1H FY19 results

Bank Of Queensland Releases 1H FY19 results

Bank of Queensland’s 1HFY19 results were released this morning which remained one of the most discussed ASX stocks among investors; the stock price plunged 4.88% in a day-trade to close at $8.950 on 11 April 2019.

The shares tumbled after the bank announced 8% decline in its 1HFY19 cash earnings after tax to $167 million, taking the statutory net profit after tax down 10% to $156 million compared to 1H FY18. The sell-off defines the dividend cut declared due to the challenging revenue and cost environment that Bank has faced during the half-year.

In the announcement to Australian Securities Exchange, Bank of Queensland Limited (ASX: BOQ) reported that its non-interest income has declined 13% to $65 million in 1H FY19, compared to the previous corresponding period. This reflects the ongoing pressure on banking fees and the long-lasting impact of the Royal Commission’s recommendation across the industry.

Sponsored ad by Kalkine

Cash basic earnings per share were reduced to 41.8 cents, down 10%, in 1H FY19 vs 1H FY18. As a result, the Board announced a lower interim dividend of 34 cents per share, reflecting a reduction of four cents per share compared to the prior corresponding period.

BOQ Interim Chief Executive Officer Anthony Rose stated that the revenue headwinds are driven by the notable changes in the banking landscape, impacting the entire industry. He added although the Banking Royal Commission had passed no specific recommendations or referrals against BOQ, its recommendations are to have long lasting industry-wide implications.

The Bank of Queensland also struggled through its Retail Bank segment where its digital platforms, lending processes and the potential to attract new owner managers in an uncertain regulatory environment have hampered customer returns and acquisitions.

Other key highlights of the financial performance of the bank include Net Interest Margin down 3 basis points to 1.94%; Return on average ordinary equity down 110 bps to 8.8% and Cost to Income ratio up 190 bps to 49.5%.

On the bright side, the company achieved BOQ Finance growth of 13% & Commercial growth of 3%, total loan growth of $756 million or 8% annualised as well as $469 million of housing growth through Virgin Money and BOQ Specialist. The upside primarily demonstrates the success of BOQ’s niche strategy which has witnessed a continued strong niche segment momentum with the growth of $94 million.

Commenting on the continuous investment in a number of foundational projects, Mr Rose said once these projects are completed, BOQ will have a more competitive position with its ability to offer a refreshed digital platform and lending processes for BOQ customer that will eventually enhance the customers’ experience. These projects are expected to be completed by 2019 and 2020.

Outlook:

Mr Rose stated that the company’s 2H19 earnings were unlikely to improve from the 1H19 level.

However, an optimism could be seen through the success of Virgin Money Australia, the niche strategy and the opportunity of reinvigorating the retail banking business in the coming 12 months.

Also Read: Bank of Queensland Announced the Retirement of its Chief Risk Officer


Disclaimer

This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.

Facebook Comments
Join Our Forum

We help you to connect with investors and people connected with the stock market.


6 Cannabis Stocks under Investor’s Limelight…

Cannabis companies that sell both medicinal weed and recreational pot. Marijuana stocks to look at. Marijuana mergers and acquisitions. Dispensary data analytics. Upcoming marijuana IPO’s Those phrases have become increasingly common as marijuana legalization spreads.

Global spending on legal cannabis is expected to grow 230% to $32 billion in 2020 as compared to $9.5 in 2017, according to Arcview Market Research and BDS Analytics. As of June 29, 2018 the United States Marijuana Index, despite a lot of uncertainty around regulations, has over the past 1 year gained 71.49%, as compared to about 12% gain seen by the S&P 500.

Click here for your FREE Report

LEAVE A REPLY

Please enter your comment!
Please enter your name here