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Bank of Queensland profit plunges as virus takes heavy toll

Business

Bank of Queensland’s net profit has plummeted 61 per cent on the back of the pandemic, a restructuring and an asset review.

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The bank reported a statutory net profit of $115 million for the full year but will continue to pay a dividend of 6 cents for the second half (12 cents for the year). The full-year payment was down 82 per cent on last year. The cash net profit was down 30 per cent to $225 million.

A big factor in the bank’s earnings fall was loan impairments, which increased to $175 million.

“This increase was primarily due to the $133 million collective provision overlay in relation to the anticipated lifetime losses from COVID-19,” the bank said.

But the bank also reported that loan deferrals had fallen almost 19 per cent since April. At the end of August the bank had 12 per cent of its housing customers and 16 per cent of SME customers still on banking relief.

Total income was up slightly to $1.09 billion, driven by lending groth of $827 million. Operating expenses were up 7 per cent on the back of the bank’s digital transformation.

Business lending was up 3 per cent for the year and home lending was broadly in line with the market.

Managing director George Frazis said that while the potential impacts of the pandemic were uncertain, Australia was well-positioned because of the Government’s handling of the crisis.

“2020 has been a year like no other,” Frazis said.

“During this time we have also substantially progressed our transformation, getting on with making BOQ a better bank.”

He said the collective provisioning meant the bank was well placed to withstand the lifetime losses arising from the pandemic.

“Our capital position is strong and organic capital generation will provide us with the ability to invest and grow our business.”

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