Bank of Queensland (ASX:BOQ) defers dividend payment as profit falls

• The Bank of Queensland (BOQ) has deferred its 2020 financial year interim dividend payment as its profit falls
• The divided has been deferred after the Australian Prudential Regulation Authority asks banks to conserve capital and reduce dividends, given the uncertain economic outlook
• The big bank also reported a 10 per cent drop in cash earnings to $151 million for the first half of 2020
• BOQ also reported its statutory net profit after tax fell 40 per cent to $93 million during the first half
• BOQ is down 3.31 per cent on the market today, selling shares for $4.97 each

The Bank of Queensland (BOQ) has deferred its 2020 financial year interim dividend payment after the Australian Prudential Regulation Authority (APRAP) urged banks to consider this due to the coronavirus impact.

Yesterday the APRA asked banks to conserve capital and reduce dividends, given the uncertain economic outlook.

A year ago, the company declared a 34¢ per share dividend per share, this was cut to 31¢ per share in the second half of the financial year and payment will be deferred until the economic outlook is clear.

The big bank also reported a 10 per cent drop in cash earnings to $151 million for the first half of 2020.

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

For the six months to the end of February, BOQ reported cash earnings after tax of $151 million. This was down 10 per cent on the prior corresponding period and one per cent on the second half of FY19.

This is because of a combination of flat revenue and a nine per cent increase in operating expenses.

BOQ said its statutory net profit after tax fell 40 per cent to $93 million during the first half. However, this was mainly due to the result of its previously announced restructuring charges and intangible asset review.

At the end of the period, BOQ had a CET1 (common equity tier 1) ratio of 9.91 per cent, up 87 basis points since the end of FY19.

“In these extremely uncertain times, we are doing all we can to support our customers and our people with prudent and meaningful measures and to ensure the strength of the bank,” CEO George Franzis said.

“I am proud of how our people have responded, swiftly adapting to this unprecedented event. We are here for our customers and we will work with them through the challenges ahead,” he added.

BOQ is down 3.31 per cent on the market today, selling shares for $4.97 each at 12:39 pm AEST.