Bank Of Queensland Limited · ASX:BOQ
Bank Of Queensland — FY2006 Earnings Presentation
44 slides from Bank Of Queensland's earnings presentation, Oct 12, 2006
Slide 1: Full Year Results
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Slide 2: Result snapshot, financial result in detail, strategy and outlook
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Slide 3: Financial performance momentum maintained
* Financial performance momentum maintained Above-system lending and deposit growth Margin maintained Continuing strong asset quality Expansion targets met Increasing shareholder value
Slide 4: Key results 2005 vs 2006
Normalised distributable net profit Normalised cash EPS (oistrioutabie earnings) Ordinary dividend Loan approvals Loan growth Retail deposit growth Net interest margin Cost to income ratio (nomaisea) 2005 $67.5m 67.9¢ 48¢ $7.5b 14% 20% 1.83% 65.8% 2006 $82.0m 76.4¢ 57¢ $10.0b 22% 18% 1.83% 64.5% Ap
Slide 5: Lending growth
Lending gro 14% System Housing Commercial Consumer Overall lending growth LNRM Annual Resulls 2006
Slide 6: Deposit growth
2005 2006 LNRM
Slide 7: Net interest margin
CA t Reported AIFRS Adj Comparable Asset Mix Liability Mix Capital AIFRS AIFRS FY06 AIFRS Impact Margin 2006 Margin Margin 2005 FY05 7 SH GUTO I UTOATTTNTIRT
Slide 8: Impaired assets to non-securitised lending
oo Impaired Assets to » Continuing growth Non-Securitised Lending flowing from expansion, not from compromising asset quality » Minimal levels of low doc loans: $304m portfolio of low doc loans, approx 3% of housing LUM HOS 2H05 1HO6 2H06
Slide 9: Owner-managed branches expansion
98 240 OMBs Interstate Qid branches Annual Results 2006
Slide 10: 23% average annual total shareholder return
Grow 23% average annual Total Shareholder Return PPP PALE A EAE OLA — Boa += All Ords (accum index) $2,900 $2,700 $2,500 $2,300 $2,100 $1,900 $1,700 $1,500 $1,300 $1,100 $900 ETT ETA
Slide 11: Dividends
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Slide 12: The result
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Slide 13: Income statement AIFRS 2005 vs 2006
l AIFRS 2005 ALFRS 2006 % Change $m $m vs PCP Total operating income 366.5 5% Total expenses 226.8 10% Underlying profit 139.7 -3% impairment on loans and advances 13.4 -8% Profit before tax 126.3 -2% Income tax 36.4 -15% Statutory profit for the year 89.9 3% Preference share dividends 77 - Movement
Slide 14: Significant items
FY05 * Sale of ATM Solutions provided an after tax gain of $14.7m FY06 One-off reduction to tax expense of $6.5m Capital loss arose from the abandonment of the previous core banking system Latest core banking system implemented in FY04 and previous system was effectively abandoned in FY05 BOQ has lo
Slide 15: Net interest income and non-interest income growth
= 46% growth in net * Increasing customer base and interest income new business driving improved non-interest income growth Significant. —— som items 3 —~ 2005 2006 2002 2003 2004 2005 2006
Slide 16: Cost to income ratio
Cost to Income Ratio 67.7% AIFRS 65.8% 64.5% Occupancy 64.0% $90m Employee 2002 2003 2004 2005 2006 2002 2003 2006 ior 1s IDI excluding the Impacts u ecteinl le crue LNRM Based on Normale: Annual Resulls 2006
Slide 17: Normalised EPS growth of 12.5%
Normalised EPS growth of 12.5% Annual Results
Slide 18: Retail/commercial lending and mortgage brokers
re; 2002 2003 2004 2005 2006 Retail/Commercial li Mortgage Brokers
Slide 19: Growth in assets
Growinall 2002 2003 2004 2005 2006 ‘i
Slide 20: Growth trends 2002-2006
2002 2003 2004 2005 2006 LNRM
Slide 21: Normalised cash ROE
15.9% Normalised Cash ROE 2002 2003 2004 2005 2006 = Normalised Cash ROE @ Significant items Excludes amortisation of customer contracts Annual Results
Slide 22: Capital ratios
Tier 2 ratio 4.3% Tier 1 Tier 1 ratio 8.2% 2002 2003 2004 2005 2006 LNRM Annual Resulls 2006
Slide 23: Strategy and outlook
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Slide 24: FY06 focus areas
We have ex In FYO6 we have focussed on: Expanding our branch footprint Expanding our business banking presence Expanding our product range through both Bank-manufactured product and alliances to capitalise on our distribution expansion Annual Results 2006
Slide 25: 2,409 touchpoints
2,409 touchpoints BOQEF: 1 AT! 281 CB: Corporate Branches OMB®: Owner-Managed Branches® BBC: Business Banking Centres BOQEF: BOQ Equipment Finance Offices ATM: = Automatic Teller Machines Te Annual Results 2006
Slide 26: Interstate branch performance
Average per interstate branch, . . (for all 33 branches Continuing to achieve our open at least 12 months) monthly targets Overall the footings are in line with expectations Continuing to expand our presence along the Eastern States Hc TT TT ee SH GUTO I UTOATTTNTIRT
Slide 27: Conversion of corporate branches to OMBs
Increased p Now converted 3 corporate branches to OMBs (one only recenily) Improvement in monthly settlements, pre and post conversion:
Slide 28: Business banking centres
Ti » Now have 13 business banking centres » Overail strategy is to achieve SME dominance in chosen segments in Queensland » Strong growth in equipment/debtor finance Equipment Finance - receivables now in excess of $2.1b, more than doubling the book since acquisition 3 years ago - achieving more tha
Slide 29: Products and alliances introduced in FY06
In FYO6 we have introduced: A wealth management alliance (Genesys) A non-conforming loan product (Challenger) A margin lending product (Macquarie) Consumer Credit Insurance (St Andrews) Commercial insurance (CGU) An improved merchant terminal offering (Keycorp) We also launched the following new BOQ
Slide 30: Retail and commercial
Retail Commercial 50% oe oS © s I<) cy Ah EGE ANNAN NAA
Slide 31: A five year transformation
A five year -t $16 UFJ & ATM interstate Solutions expansion acquisitions commenced 7 interstate, | branches | i Transformation -Qid expansion commences... commenced Orix Debtor with. new feam Finance Established BOO Share Price & 1874 «1971 ASX Listing Qid Gov't Agency model Best Regional ATM Sell d
Slide 32: Our key objectives
» Our key objectives are to: - Continued national footprint expansion - Growth through aggressive customer acquisition - Continue to outperform the market and deliver strong growth across all businesses - Become the #1 banking alternative - Consolidate in Queensland with the Pioneer merger, and cont
Slide 33: HBF alliance
We entered into an alliance with HBF this year, Western Australia’s largest health insurer We will be providing a range of BOQ-manufactured, HBF- branded banking products to their 900,000+ members This alliance allows us to leverage our core banking platform and EDS processing capability
Slide 34: Pioneer Building Society merger
s BOQ proceeding with merger with Pioneer Building Society, subject to approval of Scheme of Arrangement Offer is for 100% of Pioneer Permanent Building Society's issued capital at a value of $4.78 per share Values Pioneer at $49.6 million and is to be implemented via a scheme of arrangement Assets
Slide 35: National expansion supported by Queensland leverage
National expansion supported by Queensland leverage » Queensland economy very strong - national economy slower » Competition is intense Our footprint will continue to expand Targeting complementary strategic acquisitions Positioned for continued strong growth » Financial goals for 2007 financial yea
Slide 36: Appendix
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Slide 37: TT oC
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Slide 38: Full Year Results
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Slide 39: Net interest margin movements
SUNN al FY05 Margin FY06 Margin Impacts Movements Liability x 3" party distributions Asset Mix . O00 Securit- isation Capital 3" party Impact distributions AIFRS 2.30% 1.83% AGAAP 34 AIFRS 34 31 Aug 31 Aug Aug 05 Aug 05 05 06 iit Ae Annual Results 2006 .
Slide 40: Total on-balance sheet assets
1.83% Total On- Balance Sheet Asset: Total On- Balance Sheet Assets Total On- Balance Sheet Asset: LNRM Annual Resulls 2006
Slide 41: Funding mix
ii 2005 2006 Wholesale & Borrowings Securitisation (leasing) @ Retail @ Securitisation (housing) 2 Other ETT ETA
Slide 42: Impaired assets to non-securitised lending
Impaired Assets to Non-Securitised Lending 0.08% 0.07% 0.06% 41HOS 2HO0S 4HOG 2HO6 1H05 2H05 1HO6 2H06 Annual Results 1006
Slide 43: EVA and MVA
EVA® = Return over and above » MVA= market cap - the cost of capital (Measure of equity capital (MVA is the shareholder value created) market’s view of premium over capital base) $547 my 377m] 2004 2005 2006 2002 2003 2004 2005 © = Copyright Stern Stewart, excludes significant items
Slide 44: Interstate expansion average footings
Continuing to expand our presence along the Eastern States. Continuing to achieve average monthly targets for new lending, after allowing for initial ramp-up. Overall the footings are in line with expectations. Avg Footings Avg Lending Avg Deposits Year1 Year 2 Year3 Year4 Year 5