BOQ AGM hears of strong first quarter results


New products and an expanding branch and business banking network have led to strong growth in the first quarter of the 2006 financial year despite a slowing of the housing market, Bank of Queensland Managing Director David Liddy told today’s 2005 Annual General Meeting.


Mr Liddy said Bank of Queensland’s focus on getting the platform right for growth was continuing to deliver in the first quarter of the 2006 financial year.


“We are on track to meet our target of 1.5 to 2 times system growth largely because our growth model is not tied to the normal banking system,” Mr Liddy said today. “Our entrepreneurial, service-focused approach combined with new branch openings in ‘greenfield’ sites is keeping us ahead of the pack.”


Results from the first quarter of 2006 showed strong growth across key areas.


“Overall approvals across all sectors are up 36% on the same quarter last year,” Mr Liddy said.


“Housing approvals have returned to levels above June 2004 when we withdrew from using mortgage brokers with Housing Loans for first quarter 2006 FY up 31% on first quarter last year,” Mr Liddy said.


“This not only proves the correctness of the decision for Bank of Queensland, but highlights that banks can not just survive, but thrive, using their own channels and improved productivity.


“Business Banking approvals are up 52% for first quarter 2006 compared to first quarter last year while our leasing is up 36% for first quarter 2006 on the same period last year.


“Even in the extremely competitive area of deposits we have seen total BOQ deposits up 17% for first quarter 2006 on first quarter last year,” he said.


Mr Liddy said the growth across targeted product segments had also been strong.


“Our Market Leading Reverse Charges Account, launched in October has exceeded expectations, resulting in an 18% increase in total new account openings since its launch,” Mr Liddy said.


“Our Business Investment Account has shown funds growth of 59% and our revamped cash management account has grown 13% in the first quarter, compared to the first quarter last year.”


Mr Liddy said the introduction of Consumer Credit Insurance had increased first quarter insurance income by 261% from same period last year.


Bank of Queensland’s interstate branch roll-out was also continuing with 16 interstate branches scheduled to open between now and April next year, including one of the first outside the eastern seaboard, and another 18 under advanced negotiation. BOQ currently has 179 branches of which 40 are outside Queensland.


Mr Liddy said investors had been rewarded for their loyalty in Bank of Queensland.


“Since 2001 we have seen shareholder dividends rise 125%, the share price rise 78% at the end of the financial year and 120% as of last night, Cash Earnings Per Share had risen 153% while Return on Equity was up 30% and Return on Assets up 50%,” he said.


“That’s a pretty good result for four years of transition, and it’s important we continue with strong growth moving forward,” he said.


Chairman Neil Roberts told the meeting the Bank had an average Total Shareholder Return (TSR) of 27% for the last four years compared to a market average of 13%.


“The 2004/5 year was always going to be a critical year for our shareholders. It would be the first full year of our interstate roll-out, and it would therefore present the market with its first opportunity to make a judgment as to whether we were up to the task of executing our inter-state growth strategy as opposed merely to talking about it,” Mr Roberts said.


“Over time, the market gained confidence in our interstate expansion program. By the time we had booked but not announced our full year’s results, the price of our shares stood at circa $11.65. Since the announcement of those results, the market appears at last to have accepted that we have the ability to execute our growth strategy.


“Our share price as of last night’s close was $14.40, a rise of 35% since I reported to you last year,” he said.


Mr Roberts said that, like other listed financial institutions, BOQ still faced significant issues in day-to-day operations.


“The Bank continues to bemoan the increasing impact of stifling and costly regulation, often with questionable benefit to customers and shareholders. I mentioned this last year but it bears repeating, if only to ensure that we continue to identify with the ever increasing chorus of businesses in Australia today who are finding that compliance costs are getting out of hand. 


“Increasingly, dealing with compliance issues distracts management from running the business.  Furthermore, an increasing focus on regulatory matters tends to create a compliance culture in the organisation which diminishes a willingness to embrace what I might call responsible entrepreneurship, which is so essential in running a successful business.” he said.