The bank delivered $508 million in cash earnings,an adjusted measure of profits that is watched closely in markets. Statutory profits were $426 million,a 15 per cent increase compared with last year. It also delivered a $4.4 billion growth in home loans across its BoQ,Virgin Money and ME Bank brands.
Despite warnings economies across the globeare headed towards recession,BoQ chief George Frazis said the Australian economy was well-placed to weather a worsening outlook. He said moves by the Reserve Bank to slow the pace of interest rate hikes,and the federal government’s emphasis on balancing their upcoming budget,were “very sensible”.
“We do have to get inflation under control,and we’ve got to do that carefully,” he said.
Investors were pleasantly surprised by the bank’s stronger-than-expected net interest margin,which compares a bank’s funding costs with what it charges for loans and is a key influence on profitability.
Macquarie analyst Victor German said the bank’s strong margins would probably flow on to an upgrade in the first half of 2023.
“On one hand,it’s a positive sign for the sector that margins are improving,and that’s across the banks,” German said. “The market was worried that Bank of Queensland wasn’t going to benefit from a higher interest rate environment ... so that better than expected margin direction[probably] provided the catalyst for the bump.”
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