• Statutory loss after tax of $17.1m for full year 2012
• Fully franked final dividend of 26 cents per share, taking the full year dividend to 52 cents per share
• Normalised underlying profit before tax $443.5m; and normalised cash net profit after tax of $30.6m
• Return to profitability in the second half (2H) with a statutory profit of $73.5m
• Capital base and liquidity maintained – Core Tier 1 capital of 8.5%
• Normalised Cash Net Interest Margin (NIM) up 2bps to 1.67%, despite a competitive, low growth environment
• Deposit growth above system bringing retail funding mix to 59%
In line with guidance provided to the market on 4 October 2012, BOQ today confirmed a statutory full year loss after tax of $17.1m for 2012, due to increased provisions and one-off legacy expense items.
In announcing the result, BOQ Managing Director and CEO Stuart Grimshaw said BOQ had emerged from this year a ‘fitter’ organisation, focused on sustainable and profitable growth.
“Stronger credit and collection processes are now in place and our risk management capability is vastly improved.
“We have seen a fall in mortgage arrears over the past few months, however we continue to be prudently provided for, hence the top-up of our collective provisions.
“We are seeing stabilisation in the commercial portfolio with no new large impaired exposures in the second half.”
BOQ Strategic Focus
BOQ recognises that consumer preference for multi-channel service delivery is growing.
“This trend will continue at pace as technology evolves,” said Mr Grimshaw.
“BOQ is focused on harnessing the strength and attributes of the Bank’s personal service proposition, but in a digital age, through:
Multi-channel optimisation – revitalising the Retail Bank and optimising all distribution channels for sales and service, such as selective use of brokers in WA, online, mobile and social media capability.
Risk/Return balance – over time, reduce the reliance on housing loans which are comparatively low margin, labour intensive and lower comparative ROE; diversification and targeting profitable customer segments; improved cross sell by providing the technology and tools our people need.
Operational excellence – improving end to end lending processes for retail and commercial through technology improvements and process simplification; removing administrative tasks from branches and consolidating back office processing; keeping expense growth below inflation.
Talent and capability – new Executive Leadership Team in place; focus on organisational culture; refreshed talent in key areas.
Mr Grimshaw said BOQ would play to its obvious strengths and focus on customers who value that personal focus and longevity of relationship – primarily SME’s and families.
“We’ve reinvigorated BOQ’s Business Bank to incorporate agribusiness, property and corporate customers and diversified our product capability through financial markets, equipment finance, debtor finance and insurance. This strategy, while still at early stages, is beginning to bear fruit,” he said.
Capital and Funding
The Bank’s core equity tier 1 level at 31 August 2012 was 8.5%. This is consistent with the level following BOQ’s capital raising in April and demonstrates the capacity to pay the final dividend at 26 cents per share from the second half profit.
BOQ was able to buyback $635m of its more expensive Government Guaranteed debt in June 2012 and is well positioned to meet the new Basel III capital requirements that will come into effect from January 2013.
Mr Grimshaw confirmed that the Board had approved a fully franked final dividend of 26 cents per share, taking the full year dividend to 52 cents per share.
The following dates apply to this dividend:
• Ex-dividend date: 15 November 2012
• Record date: 21 November 2012
• Payment date: 8 December 2012