Bank of Queensland Limited · ASX:BOQ
Bank of Queensland — Shareholder Meeting (2011)
15 slides from Bank of Queensland's shareholder meeting presentation, 2011
Slide 1: Welcome to Bank of Queensland's COO's address
5 Welcome to Bank of Queensland’s COO’s address Mr Ram Kangatharan Annual General Meeting 2009 5
Slide 2: Result highlights
Result highlights 6 Normalised underlying profit up 18% at $447m Reduction in 2H11 bad debt expense; Collective provisions strengthened with all of 1H Flood & Economic Overlay collective preserved at year end Cost-to-income ratio 44.5% beat guidance Continued growth above System EF business turnarou
Slide 3: Underlying earnings momentum
Underlying earnings momentum 7 2010 2011 Normalised Underlying profit $379.0m $447.4m 18% Normalised cash NPAT $197.0m $176.6m (10%) Statutory profit $181.9m $158.7m (13%) Cash EPS (normalised fully diluted) 83.4¢ 69.8 ¢ (14¢) Ordinary dividend 52¢ 54¢ 2¢ Loan growth* (pcp) 11% 4% (7)pts Retail depo
Slide 4: Growth continued ahead of system
Growth continued ahead of system 8 Lending growth: ~1.4 system* Deposit growth: ~1.5x system 6% 12% 4% 9% BOQ System System BOQ System SystemSystem BOQ BOQ Lending growth Retail deposit growth Annual General Meeting 2009 * Last 12 months 8 Source: APRA data (GLA + Val of HL Securitised). Excludes Le
Slide 5: Strong capital base and liquidity
Strong capital base and liquidity 9 Tier 1 and total capital levels remain in excess of APRA and internal benchmarks, whilst absorbing impact of securitised assets coming back on balance sheet Conservative liquidity maintained above 15%, whilst paying down $550m GG Debt Capital adequacy Liquidity 11
Slide 6: Key achievements since GFC
Key achievements since GFC 10 Key considerations Key statistics Franchise resilience 2007 2011 - successful OMB model turned towards retail deposits and cross sales % of loan book in Queensland 75 62 Efficiency - challenging the major banks’ cost income ratio Loan growth (previous 4 years) 28.1 15.4
Slide 7: OMB Network resilience grows…
OMB Network resilience grows… 11 Total OMB commissions OMB income split Upfront income $133.1m $136.2m 26% $116.1m $93.7m FY11 Share of fees 13% Trail income Other income 54% 7% FY08 FY09 FY10 FY11 Upfront income 50% Total OMB commission payments continue Share of fees to increase, driven by existin
Slide 8: Distribution platform broadening
Distribution platform broadening 12 In a lower credit growth environment, the OMB model is being repositioned to continue its lending outperformance, but also to drive cross sales: Low cost sticky deposits Î New Day 2 Day Plus account performing well Mortgage protection Î St Andrew’s Premiums increa
Slide 9: Efficiency drive completed as forecast
Efficiency drive completed as forecast 13 Normalised Cost-to-income ratio* 62.6% Cost disciplines maintained and now embedded in operations 56.1% Investments were made to reinvigorate acquired businesses without putting 49.9% significant drag on CTI No further step changes planned 45.8% 44.5% 2007 2
Slide 10: Asset quality should return to industry trend
Asset quality should return to industry trend 14 High level of 2011 losses as a result of flood and economic overlays and 3 large exposures Overall level of bad debts well below major banks through the cycle BDD / GLA performance* 0.79% 0.62% BOQ 0.45% 0.45% 0.43% Majors 0.33% 0.30% 0.28% 0.18% 0.20
Slide 11: Structural changes to funding profile
Structural changes to funding profile 15 5 year plan Funding mix ($bn) 6% 7% 7% 16% 14% 10% 10% 11% 14% 13% Capital 16% Securitisation 16% S/T Wholesale L/T Wholesale Retail 60% 48% 52% Base FY10 FY11 FY15 Good progress in year 1 – acceleration opportunities Goal to make the Balance Sheet more attra
Slide 12: Acquisitions & operating model
Acquisitions & operating model 16 St Andrew’s and CIT now fully transitioned and operating as stand-alone businesses BOQ is running three key business lines, 2 new divisions driving capital-lite & higher margin business Banking Finance Insurance Combined ROE for the acquired businesses is ~35% vs. f
Slide 13: Restarting dividend growth…
Restarting dividend growth… 17 Final dividend of 28¢ up 2¢ (or 8%) from pcp, bringing the full year dividend up to 54¢ Spike in bad debts dilutes EPS during the period, but better organic capital generation provides platform for future dividend growth Earnings per share* Dividends Dividend yield 98¢
Slide 14: Summary
Summary 18 FY11 strong underlying result, despite challenging economic climate & weather events FY12 is a turnaround year for BOQ Group Growth of 1.5x system; with good risk/reward disciplines BOQ Finance positioned for expansion maintaining 15% ROE returns Cost disciplines now part of the DNA, but
Slide 15: Sustainable returns as BOQ transforms
Sustainable returns as BOQ transforms 19 Relative share price performance 350 Securitisation enabled a Loss of Securitisation & high return on: higher capital Single brand (BOQ) 300 Efficient, customer centric Bank with sub-45% CTI Single channel (OMB) 250 Capital-lite Insurance Single product compa