Bank of Queensland (BOQ) H2 2025 earnings summary

Executive summary

• Achieved 12% growth in cash earnings to $383 million year-over-year, with return on equity increasing by 70 basis points, driven by revenue growth, a flat cost base, and digital transformation.

• Retail bank transformation progressed, with 44% of retail customers now on the digital platform and 114 franchise branches converted.

• Commercial lending grew 14%, supported by a strategic shift in balance sheet mix and capital recycling.

• Delivered on strategic commitments, including digital mortgage launch, branch conversion, and productivity improvements.

• Strong operational resilience, improved customer experience, and cultural transformation highlighted.

Financial highlights

• Cash earnings up 12% to $383 million; statutory profit at $133 million after goodwill impairment and restructuring costs.

• Total income rose 4% to $1,657 million, with operating expenses flat at $1,072 million year-over-year.

• Cost-to-income ratio reduced by 210 basis points to 64.7%; underlying costs down 4%.

• Net interest margin increased by 8 basis points year-over-year, with a second half NIM of 1.70%.

• Fully franked dividends per share increased 12% to 38.0 cents, with a payout ratio of 66.2%.

Outlook and guidance

• Cautious outlook for FY 2026 due to geopolitical and industry headwinds; expects continued margin pressure from competition.

• Cost growth in FY 2026 expected to be sub-inflation, with material cost benefits from decommissioning legacy systems flowing into FY 2027.

• Housing contraction to slow in FY 2026, with return to growth targeted for FY 2027.

• Business lending targeted at system growth, with potential to accelerate if returns are appropriate.

• Loan impairment expense expected to remain below long-term averages but may drift higher over time.