Bank of Queensland Limited

BOQ Details

Top Management Changes: Bank of Queensland Limited (ASX: BOQ) has announced decent first half-year results with statutory net profit after tax (NPAT) of $ 174 Mn, marking a growth of 8% from 1HFY17. Return on equity (RoE) increased 10 bps to 9.9% during the same period as compared to previous corresponding period. Moreover, the group’s balance sheet remains very strong with an increase in its Common Equity Tier 1 ratio (CET1) of three basis points to 9.42 per cent during the aforesaid period. The above financial results follow the changes in top management at the company during the period, with Anthony Rose moving from the Chief Financial Officer role to the newly created role of Chief Operating Officer; Matt Baxby being appointed as Chief Financial Officer, previously Group Executive Retail Banking, and Lyn McGrath joining the Board from Commonwealth Bank of Australia. Currently, the group is focused on its strategic priorities to deliver long-term value amidst challenging current business environment. Besides this, the company had recently announced the resignation of non-executive director Margie Seale from the Board in order to consolidate and restructure Board portfolio. Ms. Seale’s resignation will take effect following the next Board meeting on 28 June 2018. The company has maintaineddiscipline in expense management which allow continuing investing into the business for the future. The company’s capital position remains very strong, providing the options to enhance shareholder returns for the long-term.


Key Financial Highlights (Source: Company Reports)

Recently, the group informed the market about the settlement which has been reached in relation to the class action initiated by Petersen Superannuation Fund Pty Ltd. If the court approves the settlement, then Petersen Class Action settlement will not have a material impact on the company’s statutory profit for FY18. The group will update the market once the settlement conditions have been satisfied. On the other hand, BOQ disclosed to ASX that one of its directors, Karen Lee Collett Penrose had an indirect interest in the Company and acquired 1,941 ordinary shares via On-market Purchase at an issue price of $10.10 per share. Moreover, John Howard Lorimer who had an indirect interest in the company acquired 5,000 ordinary shares at an issue price of $10.08 per share through on-market purchase. Meanwhile, the stock of BOQ currently trading at a cheaper price toearnings ratio (P/E), has declined by 17.47% (as of June 12, 2018) in the past three months. With a decent annual dividend yield (i.e., 7.7%), we recommend a “Hold” on BOQ at the current price level of $ 9.72 (down 1.5% on June 13, 2018), considering intense competition, regulatory uncertainty and legal proceedings.

 
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