Bank Of Queensland Limited · ASX:BOQ
Bank Of Queensland — H1 2013 Earnings Presentation
30 slides from Bank Of Queensland's earnings presentation, Feb 28, 2013
Slide 1: Half year results
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 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 represented as being indicative
Slide 3: Agenda
Agenda 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
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 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 Our costs are under
Slide 6: Key metrics
Key metrics 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¢) Ordinary dividend 28¢
Slide 7: Key management targets
Key management targets 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% YTD < Inflation < Infla
Slide 8: Delivering on strategic focus
Delivering on strategic focus 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 client acquisition an
Slide 9: Financial detail
Financial detail Anthony Rose Chief Financial Officer
Slide 10: Financial performance summary
Financial performance summary 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 $417.4m $413.6m 1% $403
Slide 11: Lending and deposit growth
Lending and deposit growth Annualised growth of 3% in loans under management and 6% in retail deposits for the half Growth in lending (1.2x system) in target segments whilst managing exit of weak and impaired assets Growth in retail deposits fully funding growth in lending, and reaching 60% of
Slide 12: Net Interest Margin
Net Interest Margin Net Interest Margin Improvement of 2bps benefiting from asset 1.98% 2.00% 0.06% repricing 0.02% 0.02% Deposit pricing managed to reflect lower 0.34% 0.34% lending growth CPS impact of ~1bp reduction in 1H13 1.64% 1.66% Aug12 Asset Pricing & Funding Costs & Capital Feb13 Mix
Slide 13: Cost-to-income
Cost-to-income Expense management discipline with successful implementation of efficiency and effectiveness program reducing duplication and providing savings in support functions Investment in front line sales capabilities (eg Agribusiness, CRM system) absorbed Cost-to-income (Cash) Expense com
Slide 14: Impairment Expense reducing
Impairment Expense reducing Annualised impairment charge to gross loans (bps) Impairment charges continue to stabilise following the 1H 2012 Asset Quality Review 194bps New risk appetite, credit policies and management processes continuing to improve the profile 82bps 40bps 43bps 34bps 1H11 2H11
Slide 15: Impaired assets fall
Impaired assets fall Impaired Assets ($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 exposures totalling 22 $30
Slide 16: Provisioning
Provisioning Commercial and BOQF provisions ($m) Retail provisions ($m) 28.9 5.3 47.6 119.3 16.7 293.6 8.1 27.3 43.4 260.8 103.4 44.5 148.1 111.1 39.2 74.8 145.5 149.7 64.2 Aug12 New Allocated Other Realisations Feb13 Aug12 New Impaired Other Realisations Feb13 Impaired Collective Collective Collect
Slide 17: Provisioning coverage relative to market
Provisioning coverage relative to market Collective Provision & General Reserve for Credit Losses(1) / RWA v Peers 1.17% 1.02% 1.03% 1.01% 0.99% 0.97% 0.47% 0.11% 0.06% 0.06% 0.76% 0.26% 0.59% 0.65% 0.92% 0.95% 0.93% 0.70% 0.71% 0.43% 0.11% BOQ 1H13 Regional 1 Regional 2 Major 1 Major 2 Major 3 Majo
Slide 18: Housing arrears
Housing arrears 30DPD 90DPD 1.76% 1.75% 1.78% 1.72% 1.42% 1.64% 1.67% 1.59% 1.34% 1.31% 1.30% 1.50% 1.25% 1.25% 1.22% 1.21% 1.26% 1.19% 0.95% 0.96% 0.93% 1.18% 1.15% 0.87% 0.86% 0.88% 0.85% 1.09% 1.07% 0.80% 0.79% 1.05% 0.70% 0.70% 0.69% 0.66% 0.70% 0.67% 0.59% 0.72% 0.62% 0.61% 0.59% 0.59% 0.56% 0.
Slide 19: Large Exposures
Large Exposures Change in underlying portfolio with the exit of impaired assets Targeting of new business and sectors progressing Top 10 Exposures February 2012 Top 10 Exposures February 2013 Connection Feb-12 Status Connection Feb-13 Status Diversified 117.8 PERFORMING Diversified 117.8 PERFORM
Slide 20: Wholesale debt maturity profile
Wholesale debt maturity profile October 2013 GG deal bought back in March No significant maturity towers until 2015 Improved funding markets provide potential opportunity to manage down remaining GG tower Major maturities ($m) $645m buyback completed on Mar-15 6 March 2013 1,000 Jun-13 Oct-13
Slide 21: Capital position
Capital position 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% 13.1% 10.8% 2.9% 0.27%
Slide 22: Strong Capitalisation v Peers
Strong Capitalisation v Peers 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 Queensland Limited ABN 32 009
Slide 23: Summary
Summary Stuart Grimshaw Managing Director and CEO
Slide 24: Summary and outlook
Summary and outlook 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 efficiency focus to contin
Slide 25: Appendices
Appendices Additional Information
Slide 26: Significant items
Significant items 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 value adjustments ($1.0m)
Slide 27: Lines of Credit arrears
Lines of Credit arrears 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% 1.63% 1.58% 1.58% 1.55%
Slide 28: Commercial
Commercial 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 Sep-12 Oct-12 Nov-12 D
Slide 29: Leasing arrears
Leasing arrears 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 Aug-12 Sep-12 Oct-12 Nov
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