Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

BOQ (ASX:BOQ) Reports, Time To Buy Shares?

Bank of Queensland Limited (ASX: BOQ) has reported its FY19 half year result, is it time to buy shares?

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.

BOQ’s FY19 Half Year Result

The Queensland-based bank reported that its cash earnings after tax fell by 8% to $167 million and the statutory net profit after tax (NPAT) dropped by 10% to $156 million.

There was an unfortunate combination of the operating expenses growing by 2% but the net interest margin (NIM), the difference between the amount it pays for loan funding and what it gets for loaning money out, fell by 0.03% to 1.94%.

During the period BOQ had a loan impairment expense of $30 million, or 13 basis points (0.13%) of total loans.

BOQ reported that its common equity tier 1 (CET1) ratio, which says how capitalised and safe it is, was 9.26%. The return on average equity (ROE) dropped 110 basis points, or 1.1%, to 8.8%.

BOQ Dividend

The BOQ Board decided to declare a dividend of 34 cents per share, which is a 10% reduction from last year, reflecting the 10% fall in profit per share (EPS) and the challenging revenue and cost environment that BOQ and the industry face.

BOQ Management Comments

BOQ Interim CEO Anthony Rose said: “Across the industry, there have been significant changes in the banking landscape which has created revenue headwinds for the sector.”

He continued, “Regulator expectations are also shifting in response to the Commission’s findings. Making the changes necessary to ensure compliance with these new regulatory obligations and expectations will increase costs for all banks.”

Any Silver Linings?

There was “strong levels of growth” in Virgin Money Australia, BOQ Finance and BOQ Specialist. The bank said its niche businesses are performing well.

Virgin Money Australia grew its housing loan book by $469 million, BOQ Finance’s book growth was $303 million and BOQ Specialist grew its housing and commercial loan books by $287 million and $70 million respectively.

Plus, BOQ said that its asset quality metrics remain resilient and its arrears are still benign. BOQ has deliberately chosen not to chase growth by lowering lending standards.

Is BOQ A Buy?

Mr Rose warned that the second half of the year’s earnings are unlikely to improve compared to the first half.

That means the revenue growth is likely to be sluggish, so I don’t think it’s the right time to buy BOQ shares. But in the longer term banking is going to get more competitive, particularly with more digital banks getting banking licences. A dividend alone shouldn’t be enough to justify an investment.

If you want to own large businesses for dividends and capital returns I’d suggest the shares mentioned in the free report below.

[ls_content_block id=”14945″ para=”paragraphs”]

[ls_content_block id=”18380″ para=”paragraphs”]

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Skip to content