The Bank of Queensland Limited (ASX: BOQ) share price has come under significant pressure on Thursday.
In afternoon trade, the regional bank’s shares are down almost 6% to $8.04.
Why is the Bank of Queensland share price sinking?
Investors have been selling down the Bank of Queensland share price today following the release of the bank’s half year results.
For the six months ended February 28, Bank of Queensland delivered a 38% lift in statutory net profit to $212 million and a 14% increase in cash earnings to $268 million. Management advised that this was driven by lending momentum, higher non-interest income, carefully managed costs, and a loan impairment expense credit in the half.
In respect to loan growth, Bank of Queensland reported a 9% increase in housing loans to $2.6 billion and an 8% lift in business loans to $600 million.
So why are its shares falling?
Given the above, investors may be wondering why the Bank of Queensland share price is falling today.
This weakness could have been caused by the bank’s performance versus the second half of FY 2021. While it recorded solid growth compared to the prior corresponding period, this wasn’t the case over the preceding half.
Versus that period, Bank of Queensland actually reported a 9% reduction in cash earnings.
When it comes to the banks, a lot of investors focus more on the performance against the previous six months rather than a year earlier because there are less seasonal factors at play compared to other sectors. So, this result could mean investors are interpreting this result as weaker than expected.
Furthermore, a note out of Citi highlights softer than expected housing loan growth from the ME business as an area of concern. Though, the broker concedes that Bank of Queensland easily beat its first half earnings estimates despite this.
The post Bank of Queensland share price sinks 6% on half year update appeared first on The Motley Fool Australia.
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More reading
- ASX 200 midday update: Bank of Queensland sinks, Allkem jumps
- Bank of Queensland shares in focus amid strong first half profit growth
- 5 things to watch on the ASX 200 on Thursday
- Brokers name 2 ASX dividend shares to buy
- Own Bank of Queensland shares? Here’s what to watch when the company reports this week
Motley Fool contributor James Mickleboro 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 Bruce Jackson.
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