Bank of Queensland (ASX: BOQ) shares down 23% in 3 months: How is the business fairing?

Team Kalkine

11 May 2023 10:20 PM AEST

Bank of Queensland (ASX: BOQ) shares down 23% in 3 months: How is the business fairing?

You are reading a free article with opinions that may differ from the recommendation given by Kalkine in its paid research reports. Become a Kalkine member today to get access to our research reports, in-depth technical and fundamental research. Learn more

Start Your Free Trial Now!

Nils Versemann@shutterstock

Highlights

BOQ shares made a fresh 52-week low of AUD 5.60 on Thursday.

The stock turned ex-dividend on Wednesday, 10 May 2023.

In 1HFY23, BOQ's net interest income (NII) expanded by 12.3% annually to AUD 832 million.

Bank of Queensland Limited (ASX: BOQ) shares, which turned ex-dividend on Wednesday, 10 May 2023, extended their decline on Thursday as well. On Thursday, the stock fell another 1.06% on top of Wednesday's 4.23% decline. Worth mentioning here is that today BOQ shares made a fresh 52-week low of AUD 5.60, which was also the closing price.

With today's decline, the stock has fallen nearly 23% in the previous three months, widely underperforming the industry benchmark S&P/ASX 200 Banks (XBK), which is down nearly 11.3% in the same time frame. Why are BOQ shares falling? Is the business not performing well? Let's scan through its 1HFY23 earnings, which were announced on 20 April, for an insight into its financial performance.

BOQ Financials

In 1HFY23, BOQ's net interest income (NII), which is interest earned over interest expended, expanded by 12.3% annually to AUD 832 million, while its total income grew by 8.5% year-on-year to AUD 902 million. The bank's NII growth was supported by a 5-basis points increase in net interest margin (NIM) and a 9% jump in average interest earnings assets.

However, its net income tanked by nearly 98% to AUD 4 million due to one-off items. Meanwhile, net loans & advances of the lender grew by 3.8% to AUD 81.6 million in the reporting period, led by growth in housing and commercial lending.

Common equity tier 1 (CET1) ratio of the bank improved to 10.71% in 1HFY23 from 9.68% in 1HFY22. Sharing guidance, the lender said that it expects the CET1 ratio to remain within the range of 10.25-10.75%.

The bank also announced an interim dividend of 20 cents per share, which will be paid on 1 June 2023 to all eligible shareholders on record as of 10 May 2023.

Worth mentioning here is that at present, the bank is undergoing a transformation to become a low-cost digitally enabled bank, a strategy which was announced in 2020, is helping the lender achieve growth across its brands, said its CEO & MD Patrick Allaway commenting on 1HFY23 results on 20 April 2023.

BOQ Stock Price Performance

At Thursday's closing price of AUD 5.600, BOQ shares are down nearly 25% in the last one year and are 28.11% away from their 52-week high of AUD 7.790 seen on 14 October last year.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, is 11 May 2023. The reference data in this report has been partly sourced from EODHD/Others.

Download Free Report – Explore 3 Stock Ideas & Industry Insights

Unlock 3 stock ideas and key industry insights in our free report. This information is general in nature and does not consider your personal objectives, financial situation, or needs. It is not financial advice.

All investments involve risk—consider independent advice before making any investment decisions.

View 3 Research Reports

Disclaimer:

This article (“Article”) has been prepared by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and its related bodies corporate who are authorised to provide general financial product advice. Kalkine.com.au and its associated pages are published by Kalkine.

Any information/advice provided in this article is general in nature and does not take into account your objectives, financial situation or needs. You should therefore consider whether the information is appropriate for your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Memorandum or other offer document (“Offer Document”) for the securities or other financial products referred to in Kalkine articles. You should obtain a copy of the Offer Document and consider it before making any decision about whether to acquire the security or financial product.

Kalkine strongly recommends that you seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) before acting on any advice/information in this Article or on the Kalkine website. Not all investments are appropriate for all people.

The information in this Article and on Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of the information contained in its articles (including this Article), newsletters and websites. All information represents our views at the date of publication and may change without notice.

The information in this Article does not constitute an offer to sell securities or other financial products or a solicitation of an offer to buy securities or other financial products.

Kalkine does not issue, sell or deal in any financial products.

This Article may contain information on past performance of particular investments. Please note past performance is neither an indicator nor a guarantee of future performance.

To the extent permitted by law, and excluding any dishonesty or gross negligence by Kalkine, Kalkine disclaims and excludes all liability for any direct, indirect, implied, punitive, special, incidental or other consequential loss or damage arising from the use of or reliance on this Article, the Kalkine website and any information published on the Kalkine website without any warranties or representations by Kalkine to you. To the extent the law prohibits or limits this exclusion, Kalkine limits its liability to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

Employees and/or associates of Kalkine and its related entities may hold interests in the securities or other financial products covered in this Article or on the Kalkine website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.

Some of the images/music that may be used in the Article are copyright to their respective owner(s). Kalkine does not claim ownership of any of the pictures displayed/music used in the Article unless stated otherwise. The images/music that may be used in the Article are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated or was found to be necessary.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.