By Alice Uribe
SYDNEY – The shares of Bank of Queensland Ltd. surged in early trading after the Australian regional lender increased its final dividend after annual profit rose 15%.
The shares rose 5.4% to A$7.20 ($4.51) after hitting a high of A$7.22. It is currently one of the best performers in the S&P/ASX 200.
BOQ on Wednesday reported net profit for the 12 months to August of A$426 million, up from A$369 million a year ago. It increased its final dividend to A$0.24 per share from A$0.22 a year ago.
E&P Financial analyst Azib Khan said in a note that the final dividend was in line with his consensus expectations. But, he said full-year 2022 cash earnings of A$508m were 3.2% below E&P expectations and 1.6% below Visible Alpha consensus.
“The miss was largely due to higher costs,” Mr Khan said.
BOQ’s net interest margin for the fiscal year declined 12 basis points to 1.74% from fiscal 2022, which BOQ attributed in part to continued competition, higher volumes of fixed rate loans and the volatility of swap rates.
“We continue to believe that the rise in the NIM for BOQ is lower than that of the major banks in general. We expect the rise in the cost of time deposits to be a bigger headwind for BOQ than the majors and we believe that BOQ has less leverage on rising cash rates than the majors,” E&P said.
BOQ shares are down 11% for the calendar year.
Write to Alice Uribe at [email protected]