Bank of Queensland Managing Director, David Liddy said the Bank expected its normalised cash net profit after tax to be at least 25 per cent higher for the six months ending 28 February 2009 (1H09) compared to the prior corresponding period.
“Growth in cash profit after tax has been underpinned by good cost discipline, strong asset quality and targeted growth, a very pleasing performance given the challenging economic environment.” Mr Liddy said.
“As we have previously advised the market, we expect to report lower net interest margins in our first-half results compared to the previous half, largely due to our focus on ‘sticky’ retail term deposits and pricing pressures with an expectation of an improvement in the second half of the year driven by more recent favourable asset and liability re-pricing strategies deployed by BOQ.”
Mr Liddy said the Bank’s asset quality remained strong, as it continued to focus on well secured housing and small-to-medium enterprise lending predominately in Queensland and Western Australia.
“Our impaired assets and 90 days-past-due results continue to demonstrate the relatively higher asset quality of our book, and we expect to report ratios similar to those of our 2008 financial year end,” he said.
“BOQ’s funding mix continues to improve in terms of both retail deposits and term debt. Our funding position continues to strengthen with a continued surplus of retail deposits to fund asset growth. This trend, when combined with the issue of $500m of government guaranteed term debt in January, means we do not have to return to the wholesale term debt markets in FY09.”
Mr Liddy said the Bank’s Project Pathways, which is seeking to further enhance the Bank’s strength through strategic partnerships, complementary mergers, portfolio optimisation and efficiency initiatives was progressing well.
“Our internal work streams have advanced implementation plans that will deliver a step change in our cost structure and allow us to reinvest in the business in years to come,” he said.
“We expect to be in a position to provide the market with further details of our efficiency initiatives at our first half results, which will be announced on 9 April 2009.”
Linfox family to retain its substantial shareholding in BOQ
Linfox Share Investment No. 2 Pty Ltd Chairman Peter Fox today said the group had completed an extensive review of its investment portfolio and reaffirmed its intention to retain the 5.7 per cent stake in Bank of Queensland.
“We want to emphasise our support for management and the Bank’s Project Pathways initiative at a time of global uncertainty and opportunity,” Mr Fox said.
“We believe this is the best strategy for the Bank to continue its growth trajectory and we want the Fox family to continue to play a role in the Bank’s ownership.”
Bank of Queensland Managing Director David Liddy welcomed the show of support.
“The Fox family’s continued support is welcomed in a market searching for greater stability,” he said.