Bank of Queensland hits more than one-and-a-half year high after annual profit jumps 130%

Reuters

Bank of Queensland hits more than one-and-a-half year high after annual profit jumps 130%

Oct 15, 2024 at 11:59 pm GMT

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Adds details throughout, analyst quote in paragraph 8

By Echha Jain

Oct 16 (Reuters) -Bank of Queensland's BOQ.AX shares hit a more than one-and-a-half year high in early trade on Wednesday after the lender posted a 130% jump in its annual profit, in line with estimates.

Shares of the Australian regional lender surged as much as 5.4% to A$6.610 by 2321 GMT, their highest level since April 3, 2023. They were also on track to post their biggest intraday percentage gain since mid-April this year.

BOQ logged a statutory net profit after tax of A$285 million ($190.75 million) for the year ended Aug. 31, in line with a Visible Alpha consensus compiled by UBS, and higher than the A$124 million reported a year earlier.

Net interest margin slipped by 13 basis points to 1.56%. The decline was more skewed to the second half of the finacial year, the company said.

Net interest income for the year decreased 9% from last year, mainly driven by higher competition across lending and deposit operations as well as higher wholesale funding costs.

The mid-cap lender, however, anticipates stable margins and revenue benefits from business bank growth in specialist areas and branch conversion, partially offset by further reductions in mortgage balances.

It also expects "broadly flat expense growth" as the company's "simplification initiatives" offset factors such as inflation, higher amortisation and branch conservion costs.

"We expect the market to focus on management's confidence to achieve flat costs in FY25 despite a number of headwinds; the pressure on business banking to drive revenue growth; and the outlook for asset quality given the very low charge realised in 2H24," Citi analysts said in a note.

The lender declared dividend for the second half of the year of 17 Australian cents per share, taking its full-year dividend to 34 Australian cents. That compares to the 41 Australian cents apiece it paid out for fiscal 2023.

($1 = 1.4941 Australian dollars)

Reporting by Echha Jain in Bengaluru; Editing by Alan Barona

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