Here’s why Bank of Queensland shares are making news again this week

The S&P/ASX 200 Index (ASX: XJO) had an incredible week last week. Even though it was a shorter trading week, the ASX 200 rose an impressive 1.98%.

When the ASX 200 has such a strong showing, you can bet that most of the ASX 200 bank shares did, too, thanks to their massive weighting in the index. But one ASX bank share didn’t join the party last week. That would be Bank of Queensland Ltd (ASX: BOQ).

Bank of Queensland shares rose by just 0.16% last week. And that was despite the big news we heard on Friday, which saw the BoQ share price lose almost 1% alone when it gave investors a glimpse into its finances. Sadly, there was little good news to celebrate.

Bank profits take a hit

The bank revealed it expected to book a $260 million write-down in earnings. This is a result of a $60 million provision for an integrated risk program and another $200 million in goodwill.

As a result, Bank of Queensland expects to report a statutory net profit after tax (NPAT) of just $4 million for the first half of FY2023. In contrast, last year’s corresponding earnings report had BoQ reveal a statutory NPAT of $212 million.

As a result of these lower profits, the bank also revealed its intentions to fund an interim dividend of 20 cents per share, fully franked, for the six months ending 31 December 2022.

Income investors might have found this especially disappointing. Last year, Bank of Queensland shares paid an interim dividend worth 22 cents per share. And 2022’s final dividend came to 24 cents per share. That means that if this upcoming dividend indeed comes in at 20 cents per share, it will represent a drop of 9% and 16.6% over those respective past payouts.

Bank of Queensland shares falter on dividend cut news

So Bank of Queensland will again be making news this week when the official earnings report is released on Thursday, 20 April.

Of course, it seems the juiciest parts of this earnings report have already been revealed. But who knows, maybe the bank has another surprise awaiting investors this week.

As my Fool colleague Brooke covered on Friday, a few ASX brokers were expecting a lot more out of BoQ.

Broker Goldman Sachs commented that a 20 cents per share dividend would represent an extremely low payout ratio (for an ASX bank, anyway) of just 51%. Goldman still has a neutral rating on BoQ shares but with a share price target of $7.21.

Earlier this month, we also covered another broker, Ord Minnet, and its $8.40 share price target for Bank of Queensland.

So we’ll have to wait and see what Bank of Queensland has in store for investors on Thursday. Perhaps it has saved the best for last. But it might be prudent to hope for the best but prepare for something less impressive.

So far today, Bank of Queensland shares have slipped by 1.4% to $6.34 each.

 

The post Here’s why Bank of Queensland shares are making news again this week appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• ASX 200 gold stock Regis Resources is tumbling 12% today. Here’s why
• 5 things to watch on the ASX 200 on Monday
• Spare change? I’d turn $3 a day into a passive income stream in under 15 years
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Friday

Motley Fool contributor Sebastian Bowen has positions in Bank of Queensland. 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.

from The Motley Fool Australia https://ift.tt/2KXa9Li