By Jayne Munday | October 15, 2009 The Bank of Queensland (BoQ) has delivered “system-beating” growth for the 2008/09 financial year, today announcing a normalised cash net profit after-tax of $187.4 million, an increase of 21 percent on last year.
Managing Director David Liddy says the bank’s continued growth in such a challenging market demonstrates its ability to take advantage of changing conditions in preparation for the market upturn.
“We are a leaner, more robust bank than we were going in to the global financial crisis and we now have a platform ready to strategically drive our continued growth forward,” he says.
“Sustained cost discipline, stringent asset-quality surveillance and targeted cost savings combined to underpin the bank’s normalised cash profit after tax of $187.4 million, a 21 percent increase over the prior year,” he says.
“Not only did we achieve our earnings forecasts, we also again outpaced the vast majority of our competitors in terms of loan growth.”
In a statement to ASX, BoQ reveals revenues from ordinary activities were up 10 percent to $629 million, while profit from ordinary activities after-tax attributable to members was up 2 percent to $141.1 million.
According to the bank’s preliminary final report for the year ended August 31, costs increased by 8 percent to $369.8 million, compared with the previous year’s expenses of $341.7 million.
However, non-operational expenses such as non-recurring home integration costs and other due diligence costs amounting to $13 million, impairment on primarily property-related equity investments of $13.2 million, restructuring costs for NSW distribution and head office of $18.7 million, and amortisation of customer contracts amounting to $10.9 million are included in the year’s expenses, the statement says.
“In the prior year, non-operational expenses such as non-recurring home integration costs and other due diligence costs amounting to $14 million, and amortisation of customer contracts amounting to $7.7 million are included in the expenses,” it says.
If these amounts were excluded, it is argued the bank’s expenses would be $314 million, a decrease of 2 percent on the prior year of $320 million.
Lending approvals for the year came to $13.6 billion, a decrease of $0.3 billion over the comparative 2008 approval result of $13.9 billion.
Normalised cost-to-income ratio was down 6.2 percent to 49.9 percent.
“This decrease of 2 percent is due to lower system growth as the Australian economy slows. The bank has however continued to outperform system growth,” the statement says.
Retail deposits also grew strongly during the 2009 financial year with an end result of $16.2 billion, an increase of $2.2 billion or 16 percent from last year.
“Competition is fierce and while smaller financial service providers like BoQ are operating on an uneven playing field, compared to the majors, BoQ remains a real alternative to the major banks,” Liddy concludes.