Bank of Queensland (ASX:BOQ) share price outperforms the big four

Bank of Queensland Limited (ASX: BOQ) shareholders rejoice – over the last 12 months the regional bank’s share price has the big four’s beat.

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Bank of Queensland Limited (ASX: BOQ) shareholders can rejoice. Over the last 12 months, the regional bank’s share price has the big four banks’ beat. Since this time last year, the Bank of Queensland share price has gained a massive 95%. Currently, the bank’s shares are swapping hands for $9.11 apiece. 

For comparison, the S&P/ASX 200 Index (ASX: XJO) has gained around 32% in the same time frame. Of the big fours’ share prices, the largest increase came from Australia and New Zealand Banking Group Ltd (ASX: ANZ). The ANZ share price has gained 72% over the past year.

Let’s take a look at what’s been driving the growth of the Bank of Queensland share price these last 12 months.

What’s been happening to the Bank of Queensland share price?

The bank’s share price growth over the past year came after a tough start. On 14 May 2020, Bank of Queensland shares hit their lowest point in 20 years – dropping to $4.51 in intraday trading.

Fortunately, this left the company with plenty of room to grow. Despite a series of bad news updates, the bank’s share price grew around 45% by the time its FY2020 full-year results were released in mid-October 2020.

Some of this bad news included the bank’s quarterly APRA Basel III Pillar 3 report for the period ending 31 May 2020. It showed the bank was faced with $112 million worth of loans overdue by more than 90 days during the fourth quarter of the 2020 financial year.

Further, in September, Bank of Queensland reported it had completed its collective provision modelling for the 2020 financial year and expected the year’s loan impairment expense to be $175 million.

The bank also announced an $11 million expense resulting from a review of historical employee underpayments and missing entitlements.

2020 financial year results

On 14 October, Bank of Queensland released its full-year results for the 2020 financial year.

For the 12 months ended 31 August 2020, the bank reported cash earnings of $225 million. That was 30% less than the previous financial year. While less than previous periods, this was better than the market’s expectations.

The bank also declared a full-year 12 cents per share fully franked dividend.

2021 so far

The 2021 financial year has been a good one so far for Bank of Queensland.

It began positively, with the bank reporting it was on track to deliver on the outlook provided in its full-year results

Then, in February this year Bank of Queensland announced it had agreed to acquire Members Equity Bank (ME Bank) for around $1.3 billion in cash. The acquisition was to be funded by an underwritten capital raising.

The following day, the bank announced its first successful capital raise of $673 million. On 15 March, Bank of Queensland announced it has completed the retail component of its underwritten pro-rata non-renounceable entitlement offer, which was the last stage of the bank’s equity raising.

Half-year results

The bank released its results for the first half of the 2021 financial year on 15 April. 

Within its results, the bank reported a 9% increase in cash earnings after tax to $165 million. The increase was driven by balance sheet growth, improved net interest margin, disciplined expense management, and lower loan impairment expense. The news didn’t stop the Bank of Queensland share price from sliding 0.79% lower on the day of the release.  

Its board also declared a 17 cents per share interim dividend and provided positive outlook commentary.

Management appeared optimistic and noted the economic outlook was showing signs of continued improvement. In light of this, the bank was guiding to a solid second-half performance.

Bank of Queensland share price snapshot 

The regional bank is now one of the best performing banks on the ASX over the last 12 months.

Its 2021 has also been fruitful – the Bank of Queensland share price has gained around 21% year to date.

The bank has a market capitalisation of around $5.85 billion, with approximately 639 million shares outstanding.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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