BOQ Emerges Stronger and More Robust From GFC
Bank of Queensland (BOQ) Managing Director David Liddy today told shareholders at the Bank’s AGM that the Bank has emerged stronger and more robust from the Global Financial Crisis (GFC).
“It is an outstanding achievement that at financial year end, Bank of Queensland emerged a leaner, more robust bank with a platform ready to strategically drive our continued growth forward.
“The Bank has continued to grow, despite the challenging economic environment, and has again recorded a strong profit.
“Even in a severe slow down the BOQ model continued to demonstrate that it can continue to grow its lending base well above system.
“In addition, our focus on costs has seen our cost to income ratio decline by 6.2% to 49.9% versus the prior period.
“In terms of capital, our ratios following the completion of our capital raising in September, which at 12.2% total capital, and 9.6% tier 1 places us at the top end of any bank in Australia and well in excess of our target capital ratios.
“We have also maintained our excess liquidity which sets us up well in FY10 to both fund our growth but also to realise cheaper funding options and improve our NIM.
“We have constantly maintained diverse sources of funding, and we recognise the importance to access markets regularly.
“At last year’s AGM, I announced Project Pathways, the goal of which was to help the Bank navigate the GFC and maximise any opportunities arising out of the changed market conditions, and I am confident that we have been successful in doing so.
“I truly believe that Bank of Queensland is a stronger and more robust organisation than it was going in to the GFC and we are well-positioned to continue our growth trajectory.”
Mr Liddy also used the opportunity to again highlight the competition issues facing the Australian banking industry.
“15 years of intensifying competition from regional banks, building societies, credit unions, and non-bank financial institutions, are now reversing.
“Call me sceptical, but it appears to me that the regional bank brands that have been purchased are being maintained to create a façade of competition.
“What this means however, is that there is a very clear void in the banking market - and therefore an opportunity for a real alternative to be created to be a genuine contender to the major banks.
“And this is the space that BOQ wants to take.
“We want to become the genuine alternative to the major banks.”
The Bank’s Chairman Neil Summerson also spoke of improving economic conditions and the opportunities for BOQ’s continued growth.
“When I stood before shareholders this time last year, the global economy was facing unprecedented and extraordinary stress. Overseas pillars of the banking industry were failing, market confidence was at a low and wholesale funding channels were all but closed,” said Mr Summerson.
“As I stand here today however, while overseas countries are battling recession, there are signs of a more buoyant economic outlook in Australia.
“Consumer confidence has rebounded with household spending and business investment gaining traction, share prices have been recovering and the Reserve Bank of Australia, the Federal Government and the International Monetary Fund have all stated that conditions in Australia have recovered more quickly than expected. In fact, our economy has been the only advanced economy in the world to record positive GDP growth in the year to June 2009.
“Economic data is pointing to more conducive trading conditions for the Bank in 2010 than the past 12 months and we believe this, combined with the sustainable lower cost base now in place as a result of the successfully completed Project Pathways, can be leveraged to grow shareholder wealth.
“BOQ has proactive growth strategies going forward and along with other regional banks has a very important role to play in making sure there is competition in the Australian banking system.
“We have the capacity and resolve to make this happen.
“We want to be, and will be, the real alternative in Australian banking. And as we emerge from the GFC a leaner, more efficient organisation than we were going in, I believe we can make this happen sooner rather than later.”