Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Where next as the Bank of Queensland defers its interim dividend

We examine the Bank of Queensland’s recent first-half results as well as look at the bank’s decision to defer its interim dividend.

The Bank of Queensland (BOQ) became the first of Australia’s major lenders to defer its dividend, when it announced its half-year results on Wednesday, 8 April.

In response to this release, shares in the bank fell by almost 5%, before finishing out the session some 2.14% lower. BOQ shares continued to underperform into the Easter break, finishing out Thursday's session some 0.9% lower, despite the ASX 200 Financials Index notching up some healthy gains.

Bank of Queensland share price: the outlook remains uncertain

Overall, the sector has been hit hard by the coronavirus pandemic, with the Financials Index down by more than 30% since February 21.

Compounding these issues, the Australian Prudential Regulation Authority (APRA) this week sent a letter to Australia's authorised deposit taking institutions – noting that it expected such institutions to ‘limit discretionary capital distributions’ and potentially make ‘prudent reductions’ to their dividend payments.

In response to all of this, the BOQ board said it would defer the payment of an interim dividend 'until the economic outlook is clearer.’

Beyond the Bank of Queensland, APRA’s directive is also likely to have a strong bearing on the dividend outlook for other lenders. Commonwealth Bank paid a dividend last week; but ANZ, NAB and Westpac will soon report half-year results to March 31. For reference, in a research note this week, UBS analysts cut their dividend forecast for those latter three banks to zero.

In a separate note to shareholders, BOQ said its decision to defer dividends was in direct response to APRA’s instructions, in light of the ‘significant disruption caused by COVID-19.’

‘BOQ understands the impact of this decision on shareholders, however also acknowledges this guidance as a prudent step for the industry,’ Chairman Patrick Alloway said.

First-half fundamentals at a glance

Overall, for the half-year, BOQ reported net cash earnings of $151 million, representing a year-over-year decline of 10%.

In step with that, the bank’s H1 profits (NPAT) came in at $93 million – representing a 40% drop on a year-over-year basis. Moreover, BOQ’s Net Interest Margin – a key metric of operating performance – fell by 3 basis points (0.03%) during the period to 1.89%.

Positively at least, BOQ saw its overall loan growth rise by 56% to $781 million. In saying that, the bank flagged that its loan performance could be volatile in the months ahead due to the headwinds facing the economy.

Elsewhere, and factoring in the potential impact of Covid-19, the bank has included a collective provision of between $49-71 million. However, this estimate was described as ‘subject to significant uncertainty.’

Looking forward, BOQ’s management further said:

'BOQ is well positioned as we enter this period with a strong balance sheet, capital and liquidity buffers, and sound asset quality.'

'While it remains difficult to assess the impact of COVID-19 on the economy, our customers and, as a result, our business, we are well-positioned to adapt to this challenging, rapidly changing environment.'

Practise trading Australian stocks with an IG demo account now.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Act on share opportunities today

Go long or short on thousands of international stocks with spread bets and CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Sunday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.