Australia’s Bank of Queensland warns of decline in net interest margin, shares fall

13-Oct-2021 Intellasia | Reuters | 9:38 AM Print This Post

Australia’s Bank of Queensland (BOQ.AX) on Wednesday warned that its net interest margin in the coming year would decline by 5 to 7 basis points due to stiff competition and a low interest rate environment, sending the lender’s shares down 4%.

The Brisbane-based regional bank was the biggest percentage loser on the benchmark index (.AXJO).

“There may still be uncertainty associated with COVID-19 over the next year,” Bank of Queensland said in a statement.

The lender is targeting a dividend payout ratio in the range of 60%-75 percent of cash earnings for 2022, and expects common equity tier 1 ratio, a closely watched measure of spare cash, to remain comfortably above 9.5%.

The bank’s 2022 outlook was “largely in-line with market expectations”, Citi said in a note.

The company said cash net profit after tax jumped 83 percent to A$412 million ($302.49 million) for the 12 months to August, also largely in-line with Citi’s estimates.

BoQ’s operating expenses for the year jumped 12 percent to A$684 million driven in part by higher business volumes, and the company expects it to grow 3 percent more on an underlying basis in financial year 2022.

It declared a final dividend of 22 Australian cents per share, up from 17 Australian cents declared in the first half of 2021.

($1 = 1.3620 Australian dollars)


Category: FinanceAsia

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