Grimshaw says BoQ over the worst
(23 October 2012 – Australia) Bank of Queensland (BoQ) chief executive Stuart Grimshaw rejected speculation the bank is now a takeover target after posting the first loss by an Australian bank in two decades.
Grimshaw reiterated the worst was behind the bank, and denied the bank would have to be taken over at some point.
'No I don't think that's the case,' he told ABC’s Inside Business program on Sunday.
'When we recorded a loss in the first half, that was about a A$90 million after tax loss, the second half we reported a A$70.3 million dollar profit.'
While the Bank of Queensland was exposed to bad debts in the southeast corridor of Queensland, it still had a great future, Grimshaw said.
'We believe we have seen the worst.
'It won't be an instantaneous return to like 2006 bad debt expense levels, but we believe that within the next three years we will return to a level similar to that.'
He said the cost of deposits was increasing.
'We've actually been able to manage both sides of the balance sheet pretty well in what's been a very tough and competitive market.'
The company shed 100 management roles about four weeks ago after highlighting seven layers of people between the chief executive and customers.
'In a small bank that's just way too many,' Grimshaw said.
'In Bank of Queensland Finance, and even at the bank, we have a number of people doing roles which could be better shared rather than isolated.'
Grimshaw confirmed the bank's funding was made up of 59 percent deposits and 41 percent wholesale funding.
Around 40 percent of its business was now done outside Queensland, with 29 branches in Western Australia, 35 in Victoria and 42 in New South Wales.
'No I don't think that's the case,' he told ABC’s Inside Business program on Sunday.
'When we recorded a loss in the first half, that was about a A$90 million after tax loss, the second half we reported a A$70.3 million dollar profit.'
While the Bank of Queensland was exposed to bad debts in the southeast corridor of Queensland, it still had a great future, Grimshaw said.
'We believe we have seen the worst.
'It won't be an instantaneous return to like 2006 bad debt expense levels, but we believe that within the next three years we will return to a level similar to that.'
He said the cost of deposits was increasing.
'We've actually been able to manage both sides of the balance sheet pretty well in what's been a very tough and competitive market.'
The company shed 100 management roles about four weeks ago after highlighting seven layers of people between the chief executive and customers.
'In a small bank that's just way too many,' Grimshaw said.
'In Bank of Queensland Finance, and even at the bank, we have a number of people doing roles which could be better shared rather than isolated.'
Grimshaw confirmed the bank's funding was made up of 59 percent deposits and 41 percent wholesale funding.
Around 40 percent of its business was now done outside Queensland, with 29 branches in Western Australia, 35 in Victoria and 42 in New South Wales.
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