BoQ on notice by Moody’s
(24 October 2011 – Australia) The Bank of Queensland’s (BoQ) credit rating is on review for possible downgrade by Moody’s.
The credit rating agency said the rise in bad debts had BoQ on its radar, saying the deterioration of the bank’s asset quality and rise in mortgage defaults meant the banks senior unsecured debt rating of A2 and subordinated debt rating of A3 were up for review.
BoQ executives blamed natural disasters and three corporate exposures for the almost doubling of its bad debts to A$200.5 million for the year to August 31.
The review for possible downgrades will focus on the outlook for BoQ's asset quality and the prospects for impairment expenses to fall in the 2012 fiscal year, Moody's said.
The agency also said it was concerned about BoQ's funding profile, with 40 percent of total funding being wholesale funding.
That remained an area of relative weakness for the bank with wholesale markets experiencing repeated bouts of volatility, Moody's said.
'Asset quality continues to deteriorate at the BoQ, albeit at a more restrained pace in the second half of 2011,' Moody's said.
BoQ executives blamed natural disasters and three corporate exposures for the almost doubling of its bad debts to A$200.5 million for the year to August 31.
The review for possible downgrades will focus on the outlook for BoQ's asset quality and the prospects for impairment expenses to fall in the 2012 fiscal year, Moody's said.
The agency also said it was concerned about BoQ's funding profile, with 40 percent of total funding being wholesale funding.
That remained an area of relative weakness for the bank with wholesale markets experiencing repeated bouts of volatility, Moody's said.
'Asset quality continues to deteriorate at the BoQ, albeit at a more restrained pace in the second half of 2011,' Moody's said.
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