Bank of Queensland shares have struggled to break above $9.80 but find plenty of buying support around the $8.50 level. At the time of writing, they’re trading for $9.33, 1.3% up on Friday’s closing price.
Encouragingly, the bank announced that it successfully acquired ME Bank on 1 July. Management described it as a “defining moment” for the bank and an opportunity to invest heavily in terms of digital transformation.
Despite going nowhere for the last 8 months, analysts at JPMorgan are bullish on what the future holds for the combined Group, according to The Australian.
What’s so bullish about the Bank of Queensland share price?
The acquisition is expected to bolster Bank of Queensland’s growth following realised synergies and a focus on improving loan turnaround times.
“We believe BoQ’s immediate priority will be to improve ME Bank’s mortgage turnaround times while looking for ‘easy wins’ on funding cost improvement,” said JPMorgan.
“ME Bank’s weakness in the competitive mortgage market was highlighted by BoQ when it announced the acquisition of the lender earlier this year.”
Breaking down the lender’s challenges, JPMorgan pointed to brand damage from its past treatment of home loan customers and slow mortgage approval times.
ME Bank was pulled over by ASIC in late May for criminal charges regarding false or misleading representations and failing to provide customers with notice about interest rate changes.
“On the latter, we expect BoQ to work hard to deliver similar levels of mortgage net promoter score improvement as has been achieved by BoQ in its ‘blue brand’ over the last two years,” said the broker.
Overall, JPMorgan has an overweight rating for the Bank of Queensland share price and its third preferred pick in the banking sector, behind Macquarie Group Ltd (ASX: MQG) and National Australia Bank Ltd (ASX: NAB).