The Bank of Queensland Limited (ASX: BOQ) share price hasn't been top of mind for many investors in recent months. Shares in the major banks have captured the headlines with the Commonwealth Bank of Australia (ASX: CBA) share price approaching a new all-time high and Westpac Banking Corp (ASX: WBC) shares racing higher.
However, the Bank of Queensland share price has been quietly having a good year on the ASX boards. Shares in the Aussie bank are up 19.3% year-to-date at yesterday's closing price of $8.98. On a 12-month horizon, the news is even better, with the Bank of Queensland share price climbing 50.2% higher in that time.
So, what's helping push this unsung ASX bank share higher in 2021?
Why the Bank of Queensland share price is soaring this year
It is worth noting 2021 has been a great year for many of the ASX bank shares. As mentioned, Commonwealth Bank and Westpac shares are enjoying strong years, climbing 18% and 28.7%, respectively.
One big factor helping these share gains for ASX banks is the current state of the economy. The Aussie banks' major lending activities are in the property market, leaving them exposed to economic factors such as interest rates and employment.
A key statistic that investors focus on for bank shares is bad debts expense. Investors like to see that losses are low, and the advent of a post-COVID recovery and schemes such as JobKeeper have helped keep this key ratio low.
That has coincided with strong gains for the Bank of Queensland share price. Shares in the regional bank have been climbing since late May 2020, aided by strong government stimulus to reduce the economic pain felt from the COVID-19 pandemic. Other factors like record-low interest rates and strong employment data have also played their part.
An improved outlook for the Aussie economy has also helped the bank free up some capital. In mid-June, Bank of Queensland announced that it would reduce its collective provision by a further $75 million. That frees up further capital to be deployed by the Aussie bank, rather than just being held for regulatory provisions.
The bank recently completed its $1.325 billion takeover of ME Bank which it hopes will allow it to compete with the Big Four banks moving forward.
Foolish takeaway
The Bank of Queensland share price has been having a solid year. Shares in one of Australia's largest regional banks have been quietly climbing as the financial sector continues a strong year of gains in 2021.
