The Bank of Queensland Limited
(ASX: BOQ) share price fell 6% after providing a trading and earnings update.
BOQ is one of Australia’s leading ‘regional’ banks with more than 180 branches throughout Australia. Unlike many other banks, many of BOQ’s branches are run by their ‘owner-managers’, who are effectively small business owners. Most of BOQ’s loans are mortgages.
Why The BOQ Share Price Declined 6%
BOQ announced that based on the year to date performance, BOQ’s cash earnings are expected to be between $165 million to $170 million, compared to the prior half year’s cash earnings was $182 million. This would be a drop of earnings of between 6.6% to almost 10%.
The main cause is an expected reduction of non interest income of between $8 million to $10 million lower than last year. The bank did say it has suffered a slight decrease in the net interest margin (NIM) due to funding pressures.
BOQ said that its CET1 ratio is expected to be above the 9.1% previously and market conditions are expected to remain challenging for the rest of the year.
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