BOQ PROFIT CLIMBS 6 PER CENT AMID 'VOLATILE' MARKET

Written on the 6 October 2016

BOQ PROFIT CLIMBS 6 PER CENT AMID 'VOLATILE' MARKET

BANK of Queensland (ASX:BOQ) has delivered a 6 per cent lift in full-year profit to $388 million amid low interest rates and increasing competition in the market.

The Brisbane-based bank posted a soft increase in cash earnings of $360 million for the 12 months to August 31 - up 1 per cent compared to a year earlier.

Bank of Queensland managing director and CEO Jon Sutton (pictured) says the main focus during this half was deposit gathering to position the company for future growth.

"Expectations of lower interest rates in Australia for longer has meant a lower rate of return on capital and low cost goods," Sutton says.

"A widening of spreads in term deposits and other liabilities has also emerged alongside fierce competition for deposits and pricing for new lending.

"We have taken steps to adapt to this low interest rate environment. Given the expensive funding environment and increased competition, we slowed asset growth in the second half, following a strong period of growth in the first half."

He says specialising in niche segments will deliver 'superior returns'.

BOQ Specialist, targeted towards medical, dental and veterinary professionals, has recorded 13 per cent commercial loan growth over the year. While the mortgage portfolio delivered $1.5 billion of growth.

Asset-based segment BOQ Finance increased by 3 per cent in a low-growth market.
"We have also expanded our presence in other niche business segments with positive results in retirement living, hospitality and agribusiness," Sutton says.

"I'm also pleased to report that Virgin Money has launched its Reward Me home loan product through the broker channel, with promising early signs.

"Since its launch in May 2016, we have received $100 million worth of loan applications."

BOQ has introduced a number of productivity and efficiency initiatives to counteract challenges in the finance industry, including $15 million invested in the operating model.

Underlying expense growth is expected to be kept to 1 per cent in FY17.

"While some of the headwinds experienced over the past year maybe one-off in nature, there are a number which will continue through 2017," Sutton says.

"Managing our costs in a disciplined way remains a key focus for the year ahead and this will be supported by the rollout of further efficiency initiatives and improvement in our digital capability."

The board will pay a dividend of 38c per share on November 22.

 


Latest News

ADELAIDE DIGITAL MARKETING GURUS CHANGING THE FACE OF ONLINE RETAILING

Frank Grasso, CEO of Adelaide based Dynamic Creative, believes his company's new software will revolutionise Adwo...

WHY A JUNIOR MINER DECIDED TO JOIN THE RANKS OF THE HOT POT STOCKS

USUALLY, when a relatively unknown explorer experiences a sharp spike in its share price, it means they've fou...

1700 BRISBANE APARTMENTS NOW MANAGED BY FORTUNE 500 COMPANY JLL

MULTINATIONAL and Fortune 500 company JLL (NYSE: JLL) has expanded its Australian dominance in the property managemen...

HARVEY NORMAN HITS OUT AT 'FALSE NEWS' OF ASIC INVESTIGATION

RETAIL giant Harvey Norman (ASX: HVN) has vehemently rejected reports its accounts are under investigation by ASIC, s...

Related News

RAY OF HOPE FOR SLATER AND GORDON AS LENDERS STEP IN

EMBATTLED law firm Slater and Gordon (ASX: SGH) has announced to the ASX that it has launched confidential discussion...

SPROUTX PROVIDES THE SEED FOR AGTECH STARTUPS

AGTECH innovation fund SproutX has opened applications for its first accelerator round, backed by $10 million from...

GAS PRICES MAY FORCE BRICKWORKS TO TAKE MANUFACTURING OVERSEAS

BRICKWORKS Limited (ASX:BKW) chairman Robert Millner says soaring energy prices may force the company to turn to offs...

CHINA CONTINUES TO COLLECT AUSSIE PROPERTY ASSETS

CHINESE coin continues to dominate Australia's offshore real estate investment market, accounting for almost h...

EVENTS COMING UP

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter