Bank of Queensland Ltd has reported a 6% increase in cash earnings to A$183 million for the half-year, as cost discipline and a strategic shift away from the competitive mortgage market offset broader macroeconomic headwinds.
The result came as the regional bank undertakes major structural reforms under the leadership of chief executive officer Patrick Allaway, who stepped into the role in 2023. Measures include the consolidation of franchisee branches into corporate-owned outlets and a workforce reduction of up to 400 roles announced last year.
Despite a A$1.5 billion contraction in its mortgage portfolio during the half, BOQ confirmed the transition to corporate-owned branches is now complete and expects this to deliver a 12 basis point boost to its net interest margin going forward. The bank has also indicated it will continue to reduce exposure to home lending in the second half while increasing its focus on business lending, particularly in healthcare and agribusiness.
Impaired loans remained low for the period, although BOQ flagged an expected rise from current levels. Barrenjoey analyst Jon Mott described the result as “reasonable”, noting the earnings beat was supported by minimal provisions for bad loans. BOQ shares rose 5.3% to A$6.84 in response.
Allaway said that while Australia remains resilient—underpinned by low unemployment, robust public spending, and a sound financial system—the risk of a global slowdown looms large.
He added that Bank of Queensland expects at least two interest rate cuts this year as the Reserve Bank of Australia (RBA) seeks to buffer the economy against external shocks.