BoQ’s Allaway urges patience as shares dive on earnings miss

afr.com:

Bank of Queensland shares dived another 32¢ to $5.46 on Wednesday, pushing the troubled lender’s declines since the start of 2023 past 19.6 per cent after it once again disappointed investors with lower than expected earnings and analysts warn that more pain is to come.

However, newly minted chief executive Patrick Allaway maintained that the company was only halfway through a turnaround strategy it had first put to the market in 2020. Mr Allaway, the former chairman of BoQ, admitted the result was disappointing, but argued shareholders had not yet lost patience.

Citi analyst Brendan Sproules said worse was still to come for BoQ. Dan Peled

“We are making the difficult decisions on things that we can control in a difficult market,” he said. “We are in a highly competitive market, and we are investing through that because it is the right thing to build a better bank.”

Investors and analysts were already forewarned of a $79 million cost hit due to the long integration of ME Bank and a restructure that will sack 250 staff, a $200 million impairment to goodwill, and two enforceable undertakings with regulators. Still, BoQ could not meet reduced expectations for profits.

Analysts had predicted cash profit to land around $470 million for the year to August 2023. BoQ revealed on Wednesday it was actually $450 million, down 8 per cent on the 2022 period. Along with the profit miss, the bank further fuelled investor pain and cut its final dividend by 3¢ to 21¢ per share.

Citi analyst Brendan Sproules said worse was still to come.

“[The] outlook commentary suggests that earnings haven’t troughed,” he said. “BoQ is flagging slower credit growth as they manage margin over volume, but it comes after a half where neither have been