The Bank of Queensland Limited (ASX: BOQ) has achieved worthy results in its first half of 2013.
Its unique Owner-Managed Branch (OMB) strategy has paid off for the company. In the structure, experienced bank managers provide the banking services while the Bank of Queensland is the Franchisor. In a report released yesterday the company announced its first half statutory profit was $100.5 million, 37% above the half year ended August 2012.
The company said the annualised lending growth of 3.1% was fully funded by retail deposit growth and, as a result, now relied less on wholesale funding. In addition to growth strategies, the company said its continued focus on asset quality led impairment expenses down 19% to $59.5 million.
Stuart Grimshaw, Managing Director and CEO, said the "solid results for this half demonstrate we are delivering against our strategy, with all key financial indicators heading in the right direction". Since November, the company's share price has rallied, up from $6.91 to open at $9.50 today.
Despite the company's announcement to purchase Virgin Money (Australia) for $40 million, which is anticipated to be completed by the end of this month, Mr Grimshaw said global economic instability continued to provide challenges to confidence and sentiment in the domestic economy. The company's retail deposits now represent 60% of the banks total deposits and borrowing, further reducing its reliance on wholesale funding.
Foolish takeaway
Australia's big four banks have held the S&P/ASX 200 (Index: ^AXJO)(ASX: ^XJO) afloat as the resource industry tumbles. However, Bendigo and Adelaide Bank (ASX: BEN) and Macquarie Group (ASX: MQG) have also helped to push the index up, increasing their share prices 47% and 33% respectively this past year. In addition to positive returns, investors in Bendigo Bank will be pleased with higher yielding dividends and a much lower price to earnings ratio.
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The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool contributor Owen Raszkiewicz does not own shares in any of the mentioned companies.
