Bank Of Queensland Limited · ASX:BOQ
Bank Of Queensland — Debt Investor Presentation (November 2017)
29 slides from Bank Of Queensland's debt investor presentation, Nov 22, 2017
Slide 1: Capital Notes Offer
For personal use only Capital Notes Offer 22 November 2017 Bank of Queensland Limited ABN 32 009 656 740. AFSL No 244616.
Slide 2: Important Notice
IMPORTANT NOTICE For personal use only Important Notice This presentation (Presentation) has been prepared by Bank of Queensland Limited ABN 32 009 656 740 (BOQ). This Presentation has been prepared in relation to the proposed offer of Capital Notes (the Offer). The Offer will be made pursuant to a
Slide 3: Agenda
AGENDA For personal use only Section 1 Offer Summary Section 2 About BOQ Section 3 Key Features of Capital Notes Section 4 Offer Process Bank of Queensland Limited Capital Notes Offer 22 November 2017 3
Slide 4: Offer Summary
For personal use only Offer Summary Bank of Queensland Limited ABN 32 009 656 740. AFSL No 244616.
Slide 5: Capital Notes Offer
CAPITAL NOTES OFFER For personal use only • Bank of Queensland Limited (BOQ) − ASX100 listed company Issuer − Well-secured balance sheet with approximately 68% of loans under management secured by residential mortgages − Approximately $5bn market capitalisation1 Offer • Fully paid, subordinated, per
Slide 6: CPS Reinvestment Offer
CPS REINVESTMENT OFFER For personal use only • Convertible preference shares issued by BOQ on 24 December 2012 that trade on ASX under the code "BOQPD“ What are CPS? • CPS may be converted (subject to certain conditions being satisfied), redeemed or transferred at BOQ’s option on 16 April 2018¹ • To
Slide 7: About BOQ
For personal use only About BOQ Bank of Queensland Limited ABN 32 009 656 740. AFSL No 244616.
Slide 8: Overview of BOQ
OVERVIEW OF BOQ For personal use only GEOGRAPHIC DISTRIBUTION ASX100 listed company NT QLD 25 1 Well-secured balance sheet with approximately 68% of 649 41 loans under management secured by residential 16 68 759 mortgages WA 703 13 8 SA 157 225 534 1 Approximately A$5 billion market capitalisation¹
Slide 9: Strategic Focus
STRATEGIC FOCUS For personal use only Vision Our dream is to create AUSTRALIA’S MOST LOVED BANK Strategy Focus on niche segments that value a more intimate banking relationship Brands Strategic There's always a better Customer in charge Grow the right way Loved like no other pillar way • Improving d
Slide 10: Key Elements of the FY17 Result
KEY ELEMENTS OF THE FY17 RESULT For personal use only CASH EARNINGS AFTER TAX ($M)(1) EARNINGS PER ORDINARY SHARE (CENTS)(1) RETURN ON EQUITY (%)(1) DIVIDENDS PER ORDINARY SHARE (CENTS) 84 74 76 66 58 Special dividend Bank of Queensland Limited Capital Notes Offer 22 November 2017 (1) FY17 includes
Slide 11: Drivers of the FY17 Result
DRIVERS OF THE FY17 RESULT For personal use only LENDING GROWTH ($M) NET INTEREST MARGIN (%) COST TO INCOME RATIO (%)(1) LOAN IMPAIRMENT EXPENSE ($M) Bank of Queensland Limited Capital Notes Offer 22 November 2017 (1) FY17 includes the benefit of a $16m profit on disposal of a vendor finance entity
Slide 12: Housing Lending Growth
HOUSING LENDING GROWTH For personal use only SUMMARY HOUSING LOAN GROWTH ($M) • Virgin Money Australia made a significant contribution to growth 1,671 BOQ Specialist Housing • BOQ Specialist continuing to deliver strong growth 1,056 349 813 (160) (384) • Branch network momentum improved in 2H17 Virg
Slide 13: Sound Credit Quality
SOUND CREDIT QUALITY For personal use only SUMMARY LOAN IMPAIRMENT EXPENSE BY PRODUCT (bps) (1) • Loan impairment expense down to 11bps of GLA² in FY17 Commercial • Commercial arrears remain stable BOQ Finance • Housing portfolio continues to perform well Group Total • BOQ Finance arrears to revert
Slide 14: Capital Position
CAPITAL POSITION For personal use only SUMMARY CET1 CAPITAL VS PEERS (%) • 9.39% Common Equity Tier 1 (CET1) ratio Standardised Advanced • Strong capital generation 10.6% 10.6% 10.1% 10.1% • Expect 1H18 impact of +20-25bps (from APS 120¹ & GRCL² 9.4% 9.2% reduction) 8.3% 42% 40% 40% 25% 25% 25% 25%
Slide 15: Improved Funding Mix
IMPROVED FUNDING MIX For personal use only SUMMARY OVERALL FUNDING MIX ($B) 46.1 46.8 • Customer Deposit growth fully funded lending growth 42.5 43.4 Long Term Wholesale • Deposit to Loan ratio of 69% Wholesale • Focus on growing transaction accounts – 10% FY17 growth or 15% Deposits including Mortg
Slide 16: Key Features of Capital Notes
For personal use only Key Features of Capital Notes Bank of Queensland Limited ABN 32 009 656 740. AFSL No 244616.
Slide 17: Summary
SUMMARY For personal use only Issuer • Bank of Queensland Limited (BOQ) Offer • Fully paid, subordinated, perpetual, unsecured, non-cumulative, mandatorily convertible notes (Capital Notes) Offer size • $300 million, with the ability to raise more or less • In a winding-up of BOQ, Capital Notes will
Slide 18: Ranking of Capital Notes in a Winding Up
RANKING OF CAPITAL NOTES IN A WINDING UP For personal use only Type Illustrative Examples Liabilities in Australia in relation to protected accounts Higher Preferred and secured debt (generally savings accounts and term deposits), liabilities preferred by law including employee entitlements and Rank
Slide 19: Distributions
DISTRIBUTIONS For personal use only • Distributions are floating rate, quarterly, discretionary, non-cumulative payments subject to no Payment Condition existing Distributions • Distributions are expected to be fully franked • Margin is expected to be in the range of 3.75% to 3.95% per annum over th
Slide 20: Optional Conversion, Redemption or Resale
OPTIONAL CONVERSION, REDEMPTION OR RESALE For personal use only • Subject to prior written approval by APRA, BOQ may elect to: Conversion, Redemption − Convert, Redeem or Resell all or some Capital Notes on 15 August 2024 or Resale by BOQ − Convert, Redeem or Resell all or some Capital Notes after a
Slide 21: Mandatory Conversion
MANDATORY CONVERSION For personal use only SCHEDULED OVERVIEW • On 15 August 2026¹, subject to satisfaction of the Mandatory Conversion Conditions illustrated below, BOQ must Convert all (but not some) Capital Notes to a variable number of 13 July 2026 20 July 2026 – 14 August 2026 15 August 2026¹ O
Slide 22: Loss Absorption Conversion
LOSS ABSORPTION CONVERSION For personal use only Loss Absorption Event • A Loss Absorption Event is each of a Common Equity Capital Trigger Event or a Non-Viability Trigger Event Common Equity Capital • A Common Equity Capital Trigger Event will occur when the Common Equity Tier 1 ratio as determine
Slide 23: CET1 Capital and Future Earnings Absorbs Losses
CET1 CAPITAL AND FUTURE EARNINGS ABSORBS LOSSES BEFORE ADDITIONAL TIER 1 SECURITIES For personal use only APRA CET1 REQUIREMENTS BOQ CET1 LOSS ABSORPTION BOQ ACTIONS TO STRENGTHEN % of earnings CAPITAL LEVELS able to be used CET1 Ratio Value range for discretionary Future earnings $0.4bn (~1.2%)5 pa
Slide 24: Comparison of Investments in BOQ
COMPARISON OF INVESTMENTS IN BOQ For personal use only Standard Term Deposit CPS Capital Notes Ordinary Shares Issuer • BOQ • BOQ • BOQ • BOQ Legal Form • Bank Deposit • Preference share • Unsecured, subordinated debt • Ordinary share Maturity • Up to five years • Perpetual • Perpetual • Perpetual •
Slide 25: Key Risks Associated with an Investment in Capital Notes
KEY RISKS ASSOCIATED WITH AN INVESTMENT IN CAPITAL NOTES For personal use only • Capital Notes are not deposit liabilities of BOQ, are not protected accounts under the Banking Act, and are not guaranteed or insured by any government, government agency or compensation scheme of Australia or any other
Slide 26: Offer Process
For personal use only Offer Process Bank of Queensland Limited ABN 32 009 656 740. AFSL No 244616.
Slide 27: Offer Structure
OFFER STRUCTURE For personal use only Institutional Offer • Offer to certain institutional investors Broker Firm Offer • Offer to Australian resident retail and high net worth clients of Syndicate Brokers • Offer to Eligible CPS Holders to apply for some or all of their CPS held at 7:00pm (Sydney ti
Slide 28: Key Dates
KEY DATES¹ For personal use only KEY DATES FOR THE OFFER DATE Record Date for determining Eligible Securityholders for Securityholder Offer 7:00pm³, 17 November 2017 Lodgement of the original Prospectus with ASIC 22 November 2017 Bookbuild 29 November 2017 Announcement of the Margin 29 November 2017
Slide 29: Key Contacts
KEY CONTACTS For personal use only Issuer Tim Ledingham, Group Treasurer James Shaw, Head of Funding Bank of Queensland Limited +61 7 3212 3342 +61 7 3212 3835 Arranger Joe Hunt Michael Cluskey Goldman Sachs +61 2 9320 1324 +61 3 9679 1138 Joint Lead Managers Tariq Holdich Adam Gaydon ANZ Securities
Bank of Queensland — Debt Investor Presentation (November 2017) on 6ix