The Bank of Queensland (BOQ) will continue focusing on cost tightening measures, after reporting a positive half-yearly result on the back of strategic changes.
In its half-yearly announcement the bank said that it remains committed to keeping costs under control after normalised cost to income ratio for the first half of 2013 was down 1.7 percentage points to 44.7 per cent.
“The bank efficiency and effectiveness program has delivered significant benefits to reduce the organisation’s layers and complexity, moving to a centralised share service model,” BOQ managing director and chief executive Stuart Grimshaw said in a results presentation.
“Our costs are under control with a reduction of three per cent over the half in what is a low revenue growth environment and we remain committed to our target of keeping cost growth below inflation, while continuing to invest in frontline capabilities.”
BOQ announced a positive half-yearly result with a 16 per cent increase in cash earnings after tax to $119.9 million and a 37 per cent increase in statutory profit to $100.5 million.
Mr Grimshaw said the bank’s enhanced focus on risk management and the credit equity of its balance sheet had driven the improvements.
“The Asset Quality Review undertaken last year and subsequent changes to our risk processes resulted in a stronger portfolio and new business quality,” Mr Grimshaw said.
“The application of a product risk appetite and strong risk management controls, as well as macro-economic factors including low interest rates and stabilising property markets, also contributed to the improved result.”
BOQ recently announced the acquisition of Virgin Money Australia, which it said will open up new market segments to the company.
Despite holding concerns over the instability of global market conditions, Mr Grimshaw said the bank is on track to deliver on its FY13 key management targets.
“We’ve announced a solid set of half-year results that demonstrate good process in a range of measures,” Mr Grimshaw said.
“We should see further improvement in quality metrics in future reporting periods given our new loan origination strategy and risk appetite framework.”
