The Bank of Queensland Limited (ASX: BOQ) share price managed a 1.3% gain during February 2023, outperforming the S&P/ASX 200 Index (ASX: XJO) which fell by 2.9%.
This is an interesting outcome considering the big four ASX bank shares went through a sizeable decline last month, including the Commonwealth Bank of Australia (ASX: CBA) share price and the National Australia Bank Ltd (ASX: NAB).
Keep in mind that the performance over one month could be influenced by where the share price started from the last month, so letâs consider the first two months of performance in 2023.
The BOQ share price went up 2.3% in the first two months of 2023, while the ASX 200 went up 3.1%. In other words, the ASX 200 went up faster in January but then went backwards noticeably.
Did anything happen in reporting season?
A lot of ASX 200 bank shares announced a result during February, telling investors how they had performed in the latest three-month or six-month period.
But, BOQ has a different accounting period â its half-year finished on 28 February 2023. Investors wonât learn about the half-year numbers and the dividend announcement until 20 April 2022, which is the planned reporting date.
However, investors may have gotten quite a good insight into how the banking sector is going with reports from other banks like CBA and NAB.
CBA reported in its half-year result that cash net profit was up 9% to $5.15 billion, while pre-provision profit went up 18% to $7.82 billion. CBAâs net interest margin (NIM) improved 23 basis points (compared to the FY22 second half) to 2.10%.
The NIM shows how much profit a bank is making on its lending, comparing the loan rate and the rate of the funding (such as savings accounts).
NAB reported that its cash earnings had increased 18.7% year over year, and it had gone up 27% when excluding tax and credit impairment charges. The NAB NIM rose 12 basis points to 1.79%.
This may well mean BOQâs margins have gone up by a pleasing amount as well. This is something that investors could cheer as it would mean higher net profit after tax (NPAT) as well as potentially stronger dividends. However, there is strong competition among ASX 200 bank shares.
Commsec currently has estimates that BOQ could generate 74 cents of earnings per share (EPS) and pay an annual dividend per share of 52 cents. That would imply the BOQ share price is valued at 9 times FY23âs estimated earnings with a grossed-up dividend yield of 11%.
BOQ share price snapshot
Despite higher interest rates, BOQ shares are down 13% in the past 12 months.
The post Why did the Bank of Queensland share price smash the ASX 200 in February? appeared first on The Motley Fool Australia.
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More reading
- Should I buy Bank of Queensland shares today for the prospect of a Bendigo Bank merger?
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Motley Fool contributor Tristan Harrison 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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