Mid-tier lender Bank of Queensland warns mortgage | Australian Markets
Mid-tier lender Bank of Queensland has warned it expects the quantity of mortgage arrears to rise amid financial uncertainty.
The Warwick Negus-chaired group, which additionally owns digital model ME Bank, on Wednesday reported its complete income within the six months to the tip of February hit $793 million, barely down from the $795m recorded a 12 months in the past.
Post-tax money earnings lifted 6 per cent to $183m, pushed by improved margins, decrease prices and subdued credit losses. This was comfortably forward of expectations of $165.7m.
BoQ reported a internet curiosity margin — or how a lot curiosity a bank receives minus the curiosity it pays — of 1.57 per cent, up two foundation factors from the second half of the 2024 financial 12 months. The end result was according to market expectations.
BoQ managing director Patrick Allaway stated it was making appreciable progress reworking to a easier, specialist bank with a “superior customer experience” although its digital platform.
“Our improved performance and stable margin in the current operating environment validate our strategy to shift our portfolio towards higher-returning segments, and reposition the retail bank as a scalable, low cost-to-serve digital bank,” he stated.
“The group has navigated some real challenges and is taking decisive action to enhance customer experience and improve the performance of BOQ for the benefit of our people, customers and shareholders.
“It is pleasing to see that the benefits from these bold decisions to simplify the business and execute our strategy are delivering positive outcomes, while recognising there is still more to do.”
BoQ stated it had accomplished its conversion of all 114 owner-managed branches to company ones in March, which might see it e-book between $115-125m in prices for the the complete 12 months.
In its outlook, BoQ famous persistent cost-of-living pressures and better for longer rates of interest meant loan impairment expense was “likely to increase from current historical lows”.
“The Australian economy improved in the half, reflecting increasing disposable household incomes, supported by a strong labour market and increasing consumer confidence,” it stated.
“Further cash rate easing is expected in 2025, although the timing and depth of the easing cycle is uncertain.
“While the evolving geopolitical environment has created significant uncertainty, the group remains optimistic about the longer-term view.”
BoQ declared an interim dividend of 18¢ a share. Shares within the company closed up 5.5 per cent to $6.86.
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