Bank of Queensland (BOQ) H1 2025 earnings summary

Executive summary

• Statutory net profit after tax rose 13% year-over-year to $171m, with cash earnings up 6% to $183m, driven by improved margins, lower costs, and subdued credit losses.

• Return on average equity increased 40bps to 6.2% and return on average tangible equity rose 50bps to 7.7% year-over-year.

• Completed conversion of 114 franchise owner-manager branches to a corporate-run network, consolidating 20 branches and welcoming 570 new team members.

• Advanced digital transformation with 140,000 ME deposit customers migrated to the new platform and 41% of retail deposit customers now on the digital banking platform.

• Maintained strong capital, liquidity, and asset quality amid macroeconomic uncertainty.

Financial highlights

• Cash earnings for the half were $183m, up 6% year-over-year; statutory net profit after tax was $171m, up 13%.

• Net interest margin held steady at 1.57%, with net interest income flat at $725m.

• Operating expenses decreased 1% to $520m, driving a 1% increase in underlying profit.

• Loan impairment expense dropped 80% year-over-year to $3m, or 1bp of gross loans and advances.

• Interim fully franked dividend of 18c per share, up 6% year-over-year, representing a 65% payout ratio.

Outlook and guidance

• Expect underlying margin to remain stable and expenses to be broadly flat in the second half of FY 2025.

• Clear pathway to FY 2026 targets for ROI and CTI, with productivity and revenue initiatives set to escalate.

• Cautious on margin outlook due to external uncertainties, including potential cash rate reductions and market responses.

• Ongoing digital transformation and branch network conversion to drive higher revenue, partially offset by increased operating costs.

• Loan impairment expense anticipated to rise from historically low levels.