The ASX bank share beating CBA in 2025

Many investors might not realise this smaller bank stock is leading the pack this year. 

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ASX bank shares represent some of the largest listed companies in Australia. 

A strong 12 months from many of these holdings helped propel the ASX 200 financials to the top of all sectors in FY25.

The S&P/ASX 200 Financials Index (ASX: XFJ) rose by 24.45% in FY25 and delivered total returns including dividends of 29.39%.

It was well documented the healthy growth of Commonwealth Bank of Australia (ASX: CBA) during that span. 

However, since the beginning of the calendar year, a smaller regional bank has actually outpaced CBA. 

Bank of Queensland Ltd (ASX: BOQ)

Since the start of this year, Bank of Queensland shares have risen 13.5%. 

This is higher than CBA during that same period (up 12.85%). 

Bank of Queensland is one of Australia's largest regional banks, still operating independently of the big four banks. 

The company offers home loans, personal finance, and commercial loans and operates both owner-managed and corporate branches.

What's behind the price surge for this ASX bank share?

This regional bank saw solid financial results for the six months ending 28 February (H1 FY 2025).

This led to a sharp rise in the stock price, including a 5.5% gain on 16 April, the day the company reported its half-year results.

This included: 

  • Statutory net profit after tax (NPAT) of $171 million, up 13% from H1 FY 2024
  • Cash earnings after tax of $183 million, up 6% year on year
  • Net interest margin (NIM), stable year on year at 1.57%

Furthermore, the regional bank offers a comparatively high dividend yield.

At the time of writing, the bank's dividend yield is 4.58%. 

Is there still upside?

Despite the strong performance this year, it seems brokers view this ASX bank share as overvalued after its recent climb. 

At the time of writing, BOQ shares are trading at $7.56 each. 

Broker Bell Potter has an underweight rating and price target of $6.10. 

That implies a downside risk of about 19.3% from current levels. 

Online brokerage platform Selfwealth lists the bank shares as overvalued by 14.8%. 

TradingView has a one-year price target of $6.25.

Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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