Bank of Queensland (BOQ) Investor Update summary

Strategic transformation and digital initiatives

• Announced conversion of all 114 Owner-Manager Branches to corporate branches by March 2025, ending the franchise model to simplify operations and reduce costs, with conversion costs estimated at AUD 115–125 million, amortized over four years from 2H FY 2025.

• Digital transformation progress includes over 260,000 customers on the new platform, AUD 6.9 billion in deposits, and 25% of retail customers now served digitally; ME customer migration to the digital bank is underway, with full migration planned by FY 2025.

• Increased simplification program target from AUD 200 million to AUD 250 million, with additional productivity initiatives and a reduction of 400 roles, supporting annualised savings of AUD 50 million by FY 2026.

• Shifting portfolio mix to focus on higher-returning business banking segments, leveraging strengths in specialist sectors and finance company offerings.

• Ongoing evaluation of further strategic initiatives under the pillars of Strengthen, Simplify, Digitise, and Optimise.

Financial and operational impacts

• Branch conversion expected to have a capital impact of ~30 basis points, with annual net cash profit after tax benefit of AUD 20 million from FY 2026 and further optimization potential.

• FY 2026 targets restated to ROE of 8% and CTI of 56%, reflecting margin compression and industry headwinds.

• Restructuring charge of AUD 25–35 million to be reflected in FY 2024 financials, with up to 400 FTE roles reduced, mainly from technology, retail banking, and operations.

• Net reduction in headcount expected in FY 2025, with reinvestment in business banking and contact centers; commitment to supporting affected employees through redundancies or redeployment.

• No change to CET1 target range (10.25–10.75%) or dividend payout ratio (60–75% of cash earnings).

Business banking and competitive positioning

• Investment in business banking includes hiring new specialist bankers and focusing on sectors such as health, professional services, hospitality, and agriculture.

• Unique finance company offering enables cross-selling and higher margins, seen as a key competitive advantage.

• Strong heritage and customer base in Queensland to be leveraged for growth, with targeted capital allocation and risk-adjusted returns.

• Payments platform development for business banking identified as a major funding opportunity.

• Expansion of service capabilities and customer reach aims to shift the portfolio mix toward higher-return specialist segments.