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BoQ posts Q1 profit, expects subdued growth for remainder

BoQ posts Q1 profit, expects subdued growth for remainder

(19 April 2013 – Australia) Bank of Queensland (BoQ) revealed its first-half net profit of A$100.5 million on Thursday and expects credit growth to remain subdued in 2013, but the bank's home loans business should improve.

BoQ’s result is a big turn-around compared to a A$90.6 million loss in the prior corresponding period, when the bank was weighed down by bad loans.

Managing director Stuart Grimshaw described the result as solid but said BoQ's outlook was cautious given mixed economic indicators.

He said businesses and consumers were worried about global economic problems which underlined significant uncertainty in the Australian economy, with small businesses showing signs of stress amid rising unemployment and the high dollar.

On the positive side, equity markets had rebounded in recent months and residential property clearance rates had been reducing available stock, which suggested that investor confidence may be improving.

'However, the risk of ongoing volatility is likely to continue to impact consumer and business confidence in the months ahead,' Grimshaw said.

'While credit growth is expected to remain subdued, the benefits of sales and service initiatives in the bank's retail network and expanded distribution via mortgage brokers should help BoQ deliver above-system housing growth in line with key management targets.'

BoQ's cash earnings after tax, a performance measure that excludes volatile or one-off items and which is favoured by banks and analysts, rose to A$119.9 million, compared to a loss of A$72.4 million a year earlier.

The biggest contributor to the improved result was a fall in bad loan expenses.

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