The Bank of Queensland Ltd (ASX: BOQ) share price didn't have a good time in April 2023, falling by 10.6%. This was significantly worse than the performance of the S&P/ASX 200 Index (ASX: XJO) which climbed by 1.8%.
It was an eventful month for the ASX bank share which reported its FY23 half-year result for the six months to 28 February 2023.
Let's look at some of the numbers, which didn't impress investors.
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Earnings recap
It said that cash earnings after tax declined by 4% to $256 million, while cash earnings per share (EPS) declined 5% to 39 cents.
The net interest margin (NIM) only saw a 4 basis point (0.04%) increase compared to the second half of FY22, despite all of the increases in the central bank interest rates.
Statutory net profit after tax (NPAT) fell 98% to $4 million after two large one-off items – a $60 million provision for its integrated risk program and a $200 million impairment of goodwill.
One of the main things that could have affected the Bank of Queensland share price was that it said the benefit of margin tailwinds was "materially reduced" over the last two months of the half, with "heightened mortgage and deposit competition".
There was also a 7% increase in operating expenses year over year, but the bank has a 'simplification program' which is intended to address the expense growth.
With the fall in profit, the business decided to cut the interim dividend per share by 9% to 20 cents per share.
Is the future looking positive for the BOQ share price?
The ASX bank share provided a number of interesting comments about the outlook.
BOQ said that the Australian economy ended the half "reasonably well placed, with low unemployment, stable growth in order books and strong terms of trade."
But, the bank also said that economic growth is moderating due to elevated inflation and higher interest rates. Further slowing is expected in the second half.
Bank of Queensland is expecting to see heightened mortgage competition continuing, as well as escalated deposit competition, with margin compression "anticipated". In other words, margins could suffer in the second half of the financial year.
The bank said that it's looking to optimise revenue, portfolio quality and returns.
Bank of Queensland share price valuation
Using the estimates on Commsec, the BOQ share price is priced at less than 9 times FY23's projected earnings.
