Bank Of Queensland Limited · ASX:BOQ
Bank Of Queensland — Investor Presentation (March 2012)
50 slides from Bank Of Queensland's investor presentation, Mar 26, 2012
Slide 1: Bank of Queensland Market update and capital raising
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Bank of Queensland Market update and capital raising 26 March 2012 Stuart Grimshaw Managing Director and CEO
Slide 2: Important notices
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Important notices 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
Slide 3: Important notices (cont)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Important notices (cont) U.S. restrictions This Presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in the United States or to any person tha
Slide 4: Important notices (cont)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Important notices (cont) Financial Performance In assessing financial performance, BOQ discloses the net profit (loss) after tax on both a ‘Statutory basis’ and a ‘Normalised Cash basis’. The S
Slide 5: Agenda
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Agenda Market update Strategy and outlook Capital raising Appendix Normalisation items Portfolio information Risk factors and selling restrictions 5 Bank of Queensland Limited ABN 32 009 656 74
Slide 6: Market update
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Market update
Slide 7: Introduction
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Introduction Release of preliminary expected results for the six months to 29 February 2012 Preliminary 1H12 expected profitability1: – Normalised underlying profit before tax of $222 million (
Slide 8: Group Executive structure November 2011
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Group Executive structure 1 November 2011 (Stuart Grimshaw’s first day as BOQ’s CEO & MD) CEO and MD Stuart Grimshaw Chief Financial Officer Chief Operating Officer Chief Risk Officer Ewan Came
Slide 9: Group Executive structure March 2012
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Group Executive structure 26 March 2012 (announced) CEO and MD Stuart Grimshaw Group Executive Group Executive Chief Operating Business Banking, Chief Financial Officer Retail & Online Chief Ri
Slide 10: Preliminary 1H12 results summary
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Preliminary 1H12 results summary ($ million) 1H111 1H122 Net interest income 310 326 Non-interest income 83 77 Total operating income 393 403 Operating expenses (178) (181) Normalised underlyin
Slide 11: Normalised cash NPAT trend
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Normalised cash NPAT trend Normalised cash NPAT ($m) Collective Provisions 119 overlay charge of 100 $160m has reduced normalised cash versus NPAT by $112m, to a 57 40 1H11 loss of $72m (30)% 1
Slide 12: Lending and deposit growth
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Lending and deposit growth Loan growth fully funded by retail deposits in 1H12 Loans under management ($b)1 Retail deposits ($b) 33.8 21.1 33.3 20.3 32.0 3.5 3.5 18.1 28.9 3.8 26.3 16.2 3.2 5.4
Slide 13: Net interest margin
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Net interest margin1 Strong NIM performance in a tough funding environment NIM up 3bps (3 bps) 5 bps 2 bps (1 bps) 1.68% 1.65% Margin FY11 Asset pricing & mix Funding & capital Non-performing O
Slide 14: Operating expenses
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Operating expenses Continued expense discipline Normalised cost-to-income ratio1 Expense composition ($m)1 178 181 3% 56.1% 10 9 9% 49.9% 75 78 4% 45.8% 45.0% 44.5% 14 15 14% 36 35 (1%) 44 43 (
Slide 15: Funding mix
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Funding mix Continued focus on retail funding Diversified funding channels domestic and offshore Funding mix (%) 6% 6% 6% 7% 6% 15% 17% 14% 11% 11% 10% 16% 14% 11% 16% 14% 15% 23% 18% 16% 48% 4
Slide 16: Increased impairment charges coupled with $160 million collective provision overlay
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Increased impairment charges coupled with $160 million collective provision overlay Specific and collective expense ($m) Commercial review of portfolio Collective Provision 328 rating and provi
Slide 17: NPLs increased by 30%
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS NPLs1 increased by 30% $135 million increase due to a combination of retail and commercial loans SE Queensland exposures were particularly prevalent Total impaired loans ($m) 579 444 423 1H11 2
Slide 18: Strengthening and protecting the balance sheet
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Strengthening and protecting the balance sheet Provision coverage ($m / %) Significantly improved specific and collective provision 2.72%1 coverage 70 Collective provision boosted by 1.56%1 242
Slide 19: Arrears management
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Arrears management Arrears 90 days + by product Home loan arrears saw an 2.74% uptick in line with seasonal 2.61% 2.35% trends 1.80% 1.73% 1H11 1.49% 1.26% 1.11% 1.15% 1.13% 2H11 0.93% New Comm
Slide 20: Strategy and outlook
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Strategy and outlook
Slide 21: Model for success
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Model for success We have initiated a closely coordinated programme of work in the three key areas: – Culture Leadership behaviours Mindset change – Strategy Structure & systems – Brand Culture
Slide 22: How we will do it
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS How we will do it We will re-invent our challenger business and explore long term breakout options 1. 1. A A more more disciplined disciplined and and focused focused organisation organisation
Slide 23: Short term priorities
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Short term priorities In the short term, we have some key themes and actions Area of work What is being looked at / changed: Quick wins • Opening up mortgage broker channel • Expand telephone b
Slide 24: How we will measure operational success
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS How we will measure operational success 1. Share of wallet Î means stronger relationships 2. Share of markets Î equals higher income 3. Share of channels Î opportunities to serve customers 4. N
Slide 25: Long term opportunities
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Long term opportunities Footprint vs. market share gaps offer significant opportunities for long term upside Metric Where we are today Best in class competitor • Banking: 59% • Banking: 58% 1.1
Slide 26: Outlook
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Outlook High exchange rate and weakened confidence has created a difficult economic environment, particularly notable in SE Queensland Credit growth has been subdued. We expect this to continue
Slide 27: Capital raising
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Capital raising
Slide 28: Introduction
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Introduction BOQ is undertaking a fully underwritten equity raising of approximately $450 million – Institutional Placement to raise approximately $150 million – Institutional Entitlement Offer
Slide 29: Offer summary
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Offer summary Offer Size and ► Equity raising of approximately $450 million Structure – Institutional Placement to raise approximately $150 million – Accelerated Institutional Entitlement Offer
Slide 30: Pro-forma capital position
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Pro-forma capital position Capital position to be significantly strengthened following the capital raising Pro-forma BOQ Core Tier 11 2.2% 8.6% 6.4% Estimated Core Tier 1 1H12 Equity raising Pr
Slide 31: Balance sheet strength
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Balance sheet strength Equity raising to place BOQ’s Core Tier 1 capital position at top end of peer range Our prudent approach to collective provisioning provides enhanced protection against a
Slide 32: Offer timetable
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Offer timetable1 Institutional Entitlement and Placement Bookbuild opens ► Monday, 26 March 2012 Institutional Entitlement and Placement Bookbuild closes ► Tuesday, 27 March 2012 BOQ shares rec
Slide 33: Appendix: Normalisation items
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Appendix: Normalisation items
Slide 34: Normalisation items
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Normalisation items ($ million) 1H11 1H121 Normalised cash net profit (loss) after tax 57 (72) Normalisation items after tax: Amortisation of customer contracts (3) (6) Amortisation of fair val
Slide 35: Appendix: Portfolio information
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Appendix: Portfolio information
Slide 36: Home Loan portfolio
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Home Loan portfolio Home loan arrears stabilised Housing arrears 30 / 90 Days Impaireds up due to 2.5% increased repossession 30+ activity, resulting in higher 2.0% 1.78% specific bad debt expe
Slide 37: Lines of Credit portfolio
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Lines of Credit portfolio Line of Credit 30 / 90 days 30 Day arrears showing positive trends until November as a 5.0% result of increased collection 4.0% 30+ activity 2.87% 3.0% Seasonal impact
Slide 38: Commercial portfolio
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Commercial portfolio Commercial 30 / 90 days February improvement in Commercial Arrears driven by 5.0% increased impaireds 4.0% 30+ 3.0% 2.46% $99m increase in impaired 2.0% loans driven by the
Slide 39: Leasing portfolio continues to improve
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Leasing portfolio continues to improve Leasing 30 / 90 days Improvements in asset quality trends holding; arrears at long 1.5% 30+ term low levels 1.17% 1.0% Impaired running down from 0.5% Aug
Slide 40: Appendix: Risks and selling restrictions
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Appendix: Risks and selling restrictions
Slide 41: Risk factors
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Risk factors Introduction There are a number of factors, both specific to BOQ and of a general nature, which may affect the future operating and financial performance of BOQ, its investment ret
Slide 42: Risk factors (cont)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Risk factors (cont) Bank of Queensland specific risks 1H12 Financial Results: The guidance as to BOQ's financial results for 1H12 contained in this Presentation is subject to finalisation of BO
Slide 43: Risk factors (cont)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Risk factors (cont) Liquidity risk: Liquidity risk arises from the possibility of BOQ being unable to meet its financial obligations as they fall due as a result of mismatches in its cash flows
Slide 44: Risk factors (cont)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Risk factors (cont) Changes in technology: Technology plays an increasingly important role in the delivery of financial services to customers in a cost effective manner. BOQ's ability to compet
Slide 45: Foreign selling restrictions
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Foreign selling restrictions This Presentation does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. New Shares ma
Slide 46: Foreign selling restrictions (cont)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Foreign selling restrictions (cont) Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies Ordinance (Cap. 32) of Hong Kong (the "Compani
Slide 47: Foreign selling restrictions (cont)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Foreign selling restrictions (cont) Any subsequent distribution of the New Shares in Italy must be made in compliance with the public offer and prospectus requirement rules provided under Decre
Slide 48: Foreign selling restrictions (cont)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Foreign selling restrictions (cont) Singapore This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore
Slide 49: Foreign selling restrictions (cont)
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS Foreign selling restrictions (cont) United Kingdom Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Service
Slide 50: NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS 50 Bank of Queensland Limited ABN 32 009 656 740
Bank of Queensland — Investor Presentation (March 2012) on 6ix