BoQ plans recoup after natural disasters hit bottom line
(27 March 2012 – Australia) Bank of Queensland (BoQ) expects to post a A$91 million first-half loss, due to natural disasters causing a large increase in impairments on loans.
The bank announced plans to raise A$450 million in response to the larger impairment costs, and flagged its results for the six months to 29 January.
BoQ impairment costs on loans will be A$328 million for the six months to February, up from A$134 million in the same period in the previous year.
That will lead to a A$91 million loss for the first half, down from a A$48 million profit in the previous corresponding period.
Its shares remain in a trading halt this morning.
'BoQ's underlying performance was achieved against a backdrop of continued variability in the strength of the Queensland economy, which has negatively impacted the commercial and residential property market,' managing director Stuart Grimshaw said in a statement.
'Queensland has been negatively impacted by the flow-on effects of a downturn in tourism and has endured recent natural disasters such as floods and cyclones.'
The bank had taken a charge of A$160 million on loans due to the economic conditions in Queensland, he said.
BoQ plans to strengthen its balance sheet by selling about 74 million new shares, which represents about one-third of the shares it currently has on issue.
Existing shareholders will be offered around A$300 million new shares in an entitlement offer, and a further A$150 million could be raised through the placement of shares to institutional shareholders.
''This equity raising will strengthen our balance sheet and provide Bank of Queensland with the capacity for continued growth,'' Grimshaw said.
''The proceeds will be used to ensure Bank of Queensland is one of the best protected banks in Australia.''
BoQ impairment costs on loans will be A$328 million for the six months to February, up from A$134 million in the same period in the previous year.
That will lead to a A$91 million loss for the first half, down from a A$48 million profit in the previous corresponding period.
Its shares remain in a trading halt this morning.
'BoQ's underlying performance was achieved against a backdrop of continued variability in the strength of the Queensland economy, which has negatively impacted the commercial and residential property market,' managing director Stuart Grimshaw said in a statement.
'Queensland has been negatively impacted by the flow-on effects of a downturn in tourism and has endured recent natural disasters such as floods and cyclones.'
The bank had taken a charge of A$160 million on loans due to the economic conditions in Queensland, he said.
BoQ plans to strengthen its balance sheet by selling about 74 million new shares, which represents about one-third of the shares it currently has on issue.
Existing shareholders will be offered around A$300 million new shares in an entitlement offer, and a further A$150 million could be raised through the placement of shares to institutional shareholders.
''This equity raising will strengthen our balance sheet and provide Bank of Queensland with the capacity for continued growth,'' Grimshaw said.
''The proceeds will be used to ensure Bank of Queensland is one of the best protected banks in Australia.''
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