Bank of Queensland (BOQ) Update

Submitted by Share Trading on 10 April, 2008 - 13:07

Bank of Queensland (BOQ) shares commentary. Macquarie Research Equities, an Australian stockmarket analyst sees this bank as trading at a premium compared to its peers in the Australian banking sector.

Bank of Queensland (BOQ): Banking Sector

Bank of Queensland (BOQ) has been able to out perform the bigger banks over the past month with a strong outlook relative to the rest of the sector. This positive outlook is based on the quality of the loan book with Bad and Doubtful Debts of only $9.4 Million in the first half and strong revenue figures. In today’s note Macquarie Research Equities (MRE) review BOQ’s report and their position in this current environment.

BOQ reported adjusted first half 08 cash earnings of $63.9m, representing EPS growth of 19.7% with an interim dividend of 35 cents in line with MREs forecast. This result has been driven by strong volume growth in loans and deposits, delivering strong revenue for the half. This has been combined with keeping operating costs down. BOQ continues to de-risk their commercial portfolio given that they still have a large exposure to the property and construction sectors. This reiterates BOQs prudent attitude in the current financial environment. MRE does highlight that there are still concerns about funding despite BOQs confidence on the subject.

MRE remain cautious of the banking sector as a whole and identify that BOQ is trading at a premium relative to the sector. At these price levels the stock appears fully priced, but if the price was to fall inline with the other banks, BOQ would become very interesting…