BOQ “Weathering the Storm Well”
Bank of Queensland Managing Director David Liddy has announced the Bank is in a strong position and the forecast for 2H08 is positive.
“We are maintaining our guidance of 10% EPS growth and expect interest margins to be slightly stronger in 2H08 vs 1H08, despite increasing cost of funds.
“I believe we are weathering the storm well.
“Our strategy on diverse funding sources and close relationships with investors who understand the Bank’s model and lower risk profile has resulted in the Bank achieving significant success in its funding plan for the year.
“Our cost disciplines are holding, we are planning deeper process re-engineering initiatives, and our commercial portfolio is reflecting better pricing for risk.
“We continue to grow retail deposits, especially as our Term Deposits continue to gain traction.
“On the asset quality side of the business, our focus remains on well-secured housing and SME lending, and we expect 2H08 to be in line with recent performance.
“Our concentration in Queensland and WA continues to pay dividends in terms of growth and superior asset quality and our Home integration is exceeding plan.”
“Our model is showing great resilience through tougher market conditions. Clearly we have the most productive sales channel in Australian retail banking coupled with good credit discipline.
This also makes us the natural consolidator of choice in the smaller end of the Australian retail banking market.”
- Management maintains guidance of 10% Normalised Cash EPS growth
- Higher cost of funds including higher cost of Term Deposits is a head wind, offset by
- Cost disciplines holding, planning deeper process re-engineering initiatives
- Commercial portfolio reflecting better pricing for risk
- Net Interest Margin in 2H08 is expected to strengthen slightly
- FY08 lending growth and retail deposit growth remains on track to be 2.0x and 2.3x system respectively
- Home integration remains on track to beat integration targets
- Strategy on diverse funding sources with close investor relationships who understand OMB model and lower risk profile is paying dividends through better access to large funding deals including private placements
- Conservative posture to ride out market volatility with liquidity exceeding 14%