Regional bank sees credit stress ahead as economy slows
One of Australia’s leading regional banks has warned the economy is likely to slow in coming months after posting lower profits weighed down by higher loan spending.
Bank of Queensland made a net profit of $136 million in the first half of its financial year, down 20 per cent from $171 million previously.
The net result was worse than market estimates of about $169 million; cash earnings fell four percent to $176 million.
Chief executive Rod Finch said it was focusing on simplifying the business, pointing to its digital banking offering attracting more new customers and ongoing cost management.
Going forward, the bank expects to see a moderation in economic growth in the second half of the fiscal year.
“Consumer and business confidence remains under pressure due to high inflation, rising cash rates and uncertainty arising from the conflict in the Middle East,” the statement said.
“Inflation concerns are expected to lead to additional cash rate increases through the remainder of calendar year 2026.”
Mr Finch acknowledged there was economic uncertainty ahead but said the bank had “strong financial and operational resilience”.
“BoQ is well positioned to navigate current conditions and support our customers and the wider economy,” he added.
Bank of Queensland recorded a credit impairment or bad debt charge of $20 million in the first half of the year, down from $3 million in the same period last year.
The bank will pay a dividend of 20 cents for the six months ending Feb. 28, up from 18 cents last time.
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