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What to expect from the Bank of Queensland (ASX:BOQ) full year result this week

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All eyes will be on the Bank of Queensland Limited (ASX: BOQ) share price on Wednesday when it releases its full year results.

Ahead of the release, I thought I would take a look to see what the market is expecting from the regional bank.

What is expected from Bank of Queensland in FY 2020?

According to a note out of Goldman Sachs, its analysts are expecting the bank to report cash earnings of $210 million.

This will be a 34% decline on the prior corresponding period and is a touch higher than the market consensus estimate of $204 million.

In respect to dividends, the broker is expecting Bank of Queensland to pay its deferred fully franked interim dividend of 10 cents per share and declare a 2 cents per share final dividend.

What else should you look for?

Goldman Sachs has suggested that investors keep an eye on the bank’s net interest margin (NIM).

It commented: “BOQ should be relatively well positioned for the current NIM environment, which has been characterised by falling basis risk, expanding housing lending spreads and lower term deposit costs through the back-end of the half. We forecast BOQ’s NIM to be flat hoh in 2H20E and then down -3 bp in FY21E (on pcp).”

Another thing the broker will be looking out for is home loan momentum. It notes that there were improvements late in the financial year and is keen to know if this momentum has carried through into FY 2021.

“BOQ grew mortgage below system through the half but momentum progressively improved back towards system levels in August. We would be interested in management commentary around the lending outlook and sustainability of momentum from August,” it explained.

Finally, Goldman estimates that Bank of Queensland will have finished the period in a solid financial position with a CET1 ratio of 10%.

Goldman Sachs has a buy rating and $6.85 price target on the bank’s shares.

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Returns As of 6th October 2020

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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