Bank Of Queensland Limited · ASX:BOQ
Bank Of Queensland — H1 2013 Earnings Presentation
30 slides from Bank Of Queensland's earnings presentation, Apr 18, 2013
Slide 1: Half year results
For personal use only Click Bank to edit Master title style of Queensland Half year results Click to edit 28 February 2013 Master subtitle style
Slide 2: Important notices
Important notices For personal use only Financial amounts All dollar values are in Australian dollars (A$) and financial data is presented as at the date stated. Pro-forma financial information and past information provided in this Presentation is for illustrative purposes only and is not represente
Slide 3: Agenda
Agenda For personal use only Result overview and Stuart Grimshaw Managing Director and CEO strategy update Financial detail Anthony Rose Chief Financial Officer Stuart Grimshaw Summary Managing Director and CEO 3 Bank of Queensland Limited ABN 32 009 656 740
Slide 4: Result overview and strategy update
For personal use only Result overview and Click to edit Master title style strategy update Click to edit Master Stuart Grimshaw subtitle style Managing Director and CEO
Slide 5: Overview
Overview For personal use only We have delivered a solid 1H13 result, with cash earnings up 16%, and are on track to 1 achieve FY13 management targets We are delivering on our strategy: multi-channel optimisation; risk/return balance; 2 operational excellence; and talent, capability & culture 3
Slide 6: Key metrics
Key metrics For personal use only Change 1H13 2H12 1H12 1H13 v 2H12 Underlying profit before tax (Cash)(1) $230.7m $221.6m 4% $221.9m Cash earnings (loss) after tax $119.9m $103.0m 16% ($72.4m) Statutory net profit (loss) after tax $100.5m $73.5m 37% ($90.6m) Cash EPS (basic) 37.9¢ 37.3¢ 2% (32.3¢)
Slide 7: Key management targets
Key management targets For personal use only Metrics(1) 1H13 Actual FY13 Target FY15+ Target BOQ asset growth(2) - Retail 0.8x system 1.0x system 1.2x system BOQ +6.1% 1.0x system 1.5x system - Business(3) System -0.6% Net Interest Margin 166bps Low-Mid 160s Low-Mid 160s Expense growth -3% Y
Slide 8: Delivering on strategic focus
Delivering on strategic focus For personal use only First broker applications taken in WA 1. Multi-channel Acquisition of Virgin Money Australia delivers online customer acquisition capability optimisation Continued investment in Business Banking capability by geography and industry Targeted
Slide 9: Financial detail
For personal use only Financial detail Anthony Rose Chief Financial Officer
Slide 10: Financial performance summary
Financial performance summary For personal use only Change 1H13 2H12 1H12 1H13 v 2H12 Cash earnings of $119.9m Net Interest Income $334.9m $330.4m 1% $326.0m Net interest income growth of 3%, day count adjusted Non interest income $82.5m $83.2m 1% $77.3m Expenses reduced through Total income $
Slide 11: Lending and deposit growth
Lending and deposit growth For personal use only Annualised growth of 3% in loans under management and 6% in retail deposits for the half Growth in lending (1.2x system) in target segments whilst managing exit of weak and impaired assets Growth in retail deposits fully funding growth in lendin
Slide 12: Net Interest Margin
Net Interest Margin For personal use only Net Interest Margin Improvement of 2bps benefiting from asset 1.98% 2.00% 0.06% repricing 0.02% 0.02% Deposit pricing managed to reflect lower 0.34% 0.34% lending growth CPS impact of ~1bp reduction in 1H13 1.64% 1.66% Aug12 Asset Pricing & Funding Cos
Slide 13: Cost-to-income
Cost-to-income For personal use only Expense management discipline with successful implementation of efficiency and effectiveness program reducing duplication and providing savings in support functions Investment in front line sales capabilities (eg Agribusiness, CRM system) absorbed Cost-to-inc
Slide 14: Impairment Expense reducing
Impairment Expense reducing For personal use only Annualised impairment charge to gross loans (bps) Impairment charges continue to stabilise following the 1H 2012 Asset Quality Review 194bps New risk appetite, credit policies and management processes continuing to improve the profile 82bps 40bps
Slide 15: Impaired assets fall
Impaired assets fall For personal use only Impaired Assets ($m) New Impaired Assets ($m) 6.7 9.0 58.9 100.6 257 117.9 525.3 120.7 26.3 478.5 203 24.0 183 151 2 accounts totalling 214.6 $11m from assets 172.9 identified as part of 1H12 Asset Quality 119 Review 178 36 Includes 2 large 284.4 281.6 expo
Slide 16: Provisioning
Provisioning For personal use only Commercial and BOQF provisions ($m) Retail provisions ($m) 28.9 5.3 47.6 119.3 16.7 293.6 8.1 27.3 43.4 260.8 103.4 44.5 148.1 111.1 39.2 74.8 145.5 149.7 64.2 Aug12 New Allocated Other Realisations Feb13 Aug12 New Impaired Other Realisations Feb13 Impaired Collect
Slide 17: Provisioning coverage relative to market
Provisioning coverage relative to market For personal use only Collective Provision & General Reserve for Credit Losses(1) / RWA v Peers 1.17% 1.02% 1.03% 1.01% 0.99% 0.97% 0.47% 0.11% 0.06% 0.06% 0.76% 0.26% 0.59% 0.65% 0.92% 0.95% 0.93% 0.70% 0.71% 0.43% 0.11% BOQ 1H13 Regional 1 Regional 2 Major
Slide 18: Housing arrears
Housing arrears For personal use only 30DPD 90DPD 1.76% 1.75% 1.78% 1.72% 1.42% 1.64% 1.67% 1.59% 1.34% 1.31% 1.30% 1.50% 1.25% 1.25% 1.22% 1.21% 1.26% 1.19% 0.95% 0.96% 0.93% 1.18% 1.15% 0.87% 0.86% 0.88% 0.85% 1.09% 1.07% 0.80% 0.79% 1.05% 0.70% 0.70% 0.69% 0.66% 0.70% 0.67% 0.59% 0.72% 0.62% 0.61
Slide 19: Large Exposures
Large Exposures For personal use only Change in underlying portfolio with the exit of impaired assets Targeting of new business and sectors progressing Top 10 Exposures February 2012 Top 10 Exposures February 2013 Connection Feb-12 Status Connection Feb-13 Status Diversified 117.8 PERFORMING Div
Slide 20: Wholesale debt maturity profile
Wholesale debt maturity profile For personal use only October 2013 GG deal bought back in March No significant maturity towers until 2015 Improved funding markets provide potential opportunity to manage down remaining GG tower Major maturities ($m) $645m buyback completed on Mar-15 6 March 201
Slide 21: Capital position
Capital position For personal use only Continued capital strength with Total Capital at 13.1% and Common Equity Tier 1 at 8.7% Internal capital generation supporting dividend growth Successful issue of $300m in Convertible Preference Shares Total Capital Ratio Common Equity Tier 1 Ratio 12.6%
Slide 22: Strong Capitalisation v Peers
Strong Capitalisation v Peers For personal use only Common Equity Tier 1 Ratio 8.72% 8.29% 8.16% 8.10% 8.00% 8.02% 7.53% BOQ Major 1 Major 2 Major 3 Major 4 Regional 1 Regional 2 Where Basel III common equity Tier 1 capital ratio was not available, the Core Tier 1 ratio was used. 22 Bank of Queensla
Slide 23: Summary
For personal use only Summary Stuart Grimshaw Managing Director and CEO
Slide 24: Summary and outlook
Summary and outlook For personal use only Solid first half profit with cash earnings up 16% Asset quality continues to improve with impaired assets trending downwards, a result of the Bank’s new loan origination strategies and risk appetite framework Strong cost management and operational effi
Slide 25: Appendices
For personal use only Appendices Additional Information
Slide 26: Significant items
Significant items For personal use only Change 1H13 2H12 1H12 1H13 v 2H12 Asset impairment Cash earnings / (loss) after tax $119.9m $103.0m $16.9m ($72.4m) driven by decision Amortisation of customer contracts ($4.9m) ($4.9m) No change ($5.6m) to enhance customer platforms Amortisation of fair val
Slide 27: Lines of Credit arrears
Lines of Credit arrears For personal use only 3.74% 30DPD 90DPD 3.50% 3.52% 4.11% 4.16% 3.38% 3.09% 3.02% 3.01% 2.92% 2.87% 2.63% 2.68% 2.68% 2.61% 2.52% 2.52% 2.29% 2.23% 2.33% 2.73% 2.71% 2.07% 2.15% 2.52% 2.61% 2.31% 2.39% 2.48% 2.35% 1.89% 1.82% 1.83% 2.35% 1.84% 1.73% 1.75% 1.63% 1.61% 1.48% 1.
Slide 28: Commercial
Commercial For personal use only 30DPD 90DPD 4.23% 4.16% 4.10% 3.68% 3.80% 3.71% 3.62% 3.66% 3.55% 3.43% 3.60% 3.39% 3.31% 3.38% 3.03% 2.52% 2.46% 2.65% 2.42% 2.29% 2.45% 2.44% 2.27% 2.43% 2.44% 2.25% 2.10% 2.25% 2.04% 1.71% 1.77% 1.26% Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12
Slide 29: Leasing arrears
Leasing arrears For personal use only 30DPD 90DPD 1.28% 1.21% 1.20% 1.12% 1.17% 1.19% 1.10% 0.94% 0.87% 0.90% 0.81% 0.82% 0.69% 0.69% 0.63% 0.54% 0.31% 0.31% 0.23% 0.28% 0.27% 0.26% 0.23% 0.20% 0.17% 0.15% 0.15% 0.11% 0.13% 0.12% 0.14% 0.11% Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Au
Slide 30: For personal use only
For personal use only