Bank of Queensland has reported rising half-year cash earnings of $268 million and will pay shareholders a 22¢ interim dividend, as the lender pursues its integration of super-fund owned ME Bank amid uncertain economic conditions.
BoQ on Thursday reported growth in both home, business lending and customer deposits had contributed to cash earnings increasing by 14 per cent over the six months to December 31.
Home lending was up 9 per cent to $2.6 billion, business lending was up 8 per cent to $600 million and deposit balances up $1.8 billion over the period, contributing to a statutory net profit after tax increase of 38 per cent of $212 million.
Bank of Queensland chief executive George Frazis.
BoQ acquired ME Bank last July after decades of ownership by industry superannuation funds. BoQ reported ME Bank’s home lending portfolio returned to black, growing by 2 per cent over the half after falling for the prior two halves.
Chief executive George Frazis said the integration of ME Bank had progressed well amid mixed economic conditions.
“Australia remains well-placed for continued economic recovery, with low unemployment, high terms of trade and a large pipeline of residential construction and infrastructure work to be done,” he said.
“However, uncertainty remains given geopolitical tensions, elevated inflation, rising interest rates, supply chain and labour disruptions.“
Drilling into the details, BoQ reported its net interest margin – the key measure of profitability – had fallen by 0.12 per cent while the provision for bad loans had been reduced by $15 million amid more favourable economic conditions.
Shareholders will receive the fully franked dividend on May 26, an increase of 29 per cent on the corresponding period.
Frazis said the results demonstrate the bank’s “disciplined execution” of the ME Bank integration, as well as its digital strategy to move operations onto the cloud.
“This has been achieved during a period of ongoing economic uncertainty from COVID, and at a time of notable change as we bed down the integration of ME and upgrade our digital capability for customers and our people,” Frazis said.
“We are a step closer to realising our bold strategy of building a truly multi-brand, cloud-based, digital retail bank.”