The Bank of Queensland Ltd (ASX: BOQ) share price is charging higher today.
Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed yesterday trading for $6.27. In morning trade on Wednesday, shares are swapping hands for $6.55 apiece, up 4.47%.
For some context, the ASX 200 is down 0.26% at this same time.
This outperformance follows the release of Bank of Queensland's financial results for the year ending 31 August (FY 2024).
Here are the highlights.
Bank of Queensland share price gains despite profit slump
- Revenue of $1.60 billion, down 8% from FY 2023
- Cash net profits after tax (NPAT) of $343 million, down 24% year on year
- Operating expenses of $1.07 billion, up 6% from FY 2023
- Net interest margin decline by 0.13% to 1.56%
- Fully franked final dividend of 17 cents per share, down 19% from the prior final dividend
What else happened during the year?
On the plus side of the ledger and likely supporting the Bank of Queensland share price, the statutory NPAT for FY 2024 of $285 million was up 130% from FY 2023. However, FY 2023's figures were dragged down by a number of large one-off items amid the bank's restructuring.
The 24% decline in cash profits was driven by higher funding costs, inflation and investment in risk, compliance and technology costs.
Net interest income was down 9% year on year to $1.46 billion. This was impacted by the 0.13% contraction in NIM and average interest-earning assets amid stiff lending and deposit competition.
Loan impairment expense came in at $20 million, an improvement of 72% on FY 2023.
The bank's CET1 decreased 0.25% year on year to 10.66%. That remains at the top end of management's target range of 10.25% to 10.75%.
On the lending front, home lending was down $944 million year on year, while business lending increased by $323 million.
FY 2024 saw the bank increase its customer deposits by $397 million, or 1% year on year.
In August, Bank of Queensland announced it was cutting 400 jobs to "streamline its operating model as part of its ongoing transformation".
What did management say?
Commenting on the results helping to lift the Bank of Queensland share price today, CEO Patrick Allaway said: "Today's result demonstrates the group's continued execution of our strategic initiatives against a difficult backdrop."
Allaway added:
With the foundational build of our digital bank largely complete and customer migration underway, we are at an inflection point in our transformation with a clear pathway to materially improve shareholder returns.
Operationally, we have been disciplined, recycling capital from lower returning home lending to our higher returning business bank and finance company…
We have navigated through two difficult years, demonstrating consistent execution and are now starting to see the benefits of our transformation.
What's next?
Looking at what might impact the Bank of Queensland share price in the year ahead, management expects stable margins and revenue benefits from business bank growth in specialist areas, and branch conversion. However, these will be partially offset by further reductions in mortgage balances.
Expense growth is forecast to be broadly flat, with the transformation investment spend coming down materially.
Capital is forecast to remain within management's target range of 10.25% to 10.75%.
Bank of Queensland share price snapshot
With today's intraday gains factored in, the Bank of Queensland share price is up 20.8% in 12 months.
