BOQ Trading Update
BOQ today advised the market on the impact of the recent weather events on its business, 62% of which is in Queensland.
BOQ Managing Director David Liddy said the Bank has undertaken a review of its portfolio and operations following the floods and cyclones and has reduced the FY2011 profit
guidance range by $35m to $175m to $195m.
“We have increased our provisioning levels for 1H11 by $45m as a result of a one-off management overlay resulting from a number of weather-related factors and prevailing
economic conditions,” said Mr Liddy.
“Given our high business concentration in Queensland, we’ve taken a prudent approach to these events. Additionally we expect to see asset growth accelerate in FY2012 as the rebuild
work in flood-affected areas gains momentum and conditions start to improve.
“In addition, we have managed our balance sheet conservatively through the GFC and we are positioned to take these charges while still maintaining regulatory capital well within requirements. Capital levels remain at the upper end of our target range of 11% to 12%.
“Given these one off charges, the Board may need to review the projected dividend growth,” said Mr Liddy.
“Operating performance of the acquired businesses and expense disciplines continue to perform to expectations and we believe the integration of the acquired businesses and the operating disciplines in place provide for much improved performance of the Bank in FY2012.
“In fact, we have ear-marked an additional $2b new lending for this rebuilding in Queensland in the next 12 to 18 months.”
The Bank’s half year ends on 28 February and its interim results and dividend will be released to the market on 14 April 2011.