Investors loved the Bank of Queensland (BOQ) full year result with its better than expected 19% jump in cash profit. The shares were up more than 12% at one stage before drifting lower to end the day still up 7.3% at $12.46.
The Brisbane-based bank reported a cash profit of $357 million, helped by a 15% drop in impaired loan expense to $74 million.
Statutory profit rose 22% to $318 million. It was lower than cash earnings due to one-off costs for the 2014-15 financial year.
Full year dividend is up 12% to 74 cents a share with a modest 2 cents a share rise in the final to 38 cents a share.
Revenue rose 4% to $1.08 billion, largely driven by the continuing benefits from the acquisition of Investec’s $2.5 billion loan portfolio last year.
But total lending did rise 7%, mainly driven by owner-occupier home loans, which were up 12%, unlike other banks which have chased investor lending. Investor home loans rose a slower 5% for the year.
The bank’s net interest margin rose 0.15 percentage points to 1.97% largely due to the higher margin Investec business.
The bank’s cost-to-income ratio rose from 43% to 46% for the year.
BOQ 1Y – Investec acquisition helps lift BoQ
CEO Jon Sutton said in a statement the bank’s costs had “rebased” to about 45% with the acquisition of the higher-margin business of Investec, now named BoQ Specialist.
But he said he expected the bank’s costs to return to a cost-to-income ratio in the low 40s in future.
“BoQ has now delivered record results for five successive halves, a significant achievement in an environment of low growth and changing regulations," Mr Sutton said in yesterday’s statement.
"Though we have more work to do, particularly around returning to higher levels of asset growth, most of our key financial metrics are moving in the right direction."
