Bank of Queensland Ltd (ASX: BOQ) shares have underperformed the big four S&P/ASX 200 Index (ASX: XJO) bank stocks over the past year.
Though that's not to say the company has left shareholders entirely wanting.
Shares closed yesterday trading for $6.42 apiece. That sees the bank stock up under 10% since this time last year.
Atop those capital gains, Bank of Queensland shares also trade on a fully franked 5.9% trailing dividend yield.
But with the bank recently confirming it will pursue another round of sizeable job cuts, Seneca Financial Solutions' Arthur Garipoli believes now is a good time to sell and potentially profit from this stock and put your investment money to work elsewhere.
Time to sell your Bank of Queensland shares?
Explaining why he has a sell recommendation on Bank Of Queensland shares, Garipoli said (courtesy of The Bull):
The bank is simplifying its retail distribution channels. The bank announced it would convert all 114 of its owner managed branch network to corporate branches, which is expected to be completed by March 2025.
Cutting 400 full time jobs will drive down costs. Executing these plans carries risk. A return on equity is expected to fall from 9.25% to 8% in fiscal year 2026.
Other stocks appeal more at this stage of the cycle.
What's happening with the ASX 200 bank stock?
Management confirmed the bank's intentions to axe up to 400 full-time employees on 22 August.
While that was lower than speculations of up to 600 job cuts, investors were clearly displeased with the update, sending Bank of Queensland shares down 7.3% on the day.
The company said it had "identified further opportunities to streamline its operating model as part of its ongoing transformation".
With the bank working on simplifying its operations and increasing its reliance on technology, 400 employees are expected to be let go.
While the staff reductions are forecast to cut costs by some $50 million a year, the move will take a bite out of FY 2024 profits.
The bank said it expects to recognise a post tax restructuring charge of $25 million to $35 million "that will impact FY24 statutory net profit after tax".
Atop the savings the bank will eventually realise from the staff cuts, management is targeting an additional $200 million in cost savings from other measures.
These measures include the bank's digital transformation program, with management reporting that 25% of the bank's retail customers are now using its new digital platform.
While these cost-cutting measures may support Bank of Queensland shares longer-term, Garipoli still recommends selling and investing in stocks that "appeal more at this stage of the cycle".
