Bank of Queensland Earnings: Getting Further Away From Targets Until Funding Cost Pressures Ease

It’s a difficult operating environment for Bank of Queensland—first-half 2024 cash profit fell 33% to AUD 172 million, and return on equity, or ROE, was just 5.8%. The no-moat bank is grappling with intense lending and deposit competition, in part due to underinvestment in its digital capability over the years, and in part because it has been forced by regulators to address risk and compliance issues. As the bank progresses through these issues, it is likely to be more risk-averse and cause workflow disruptions to staff who should be focused on lending. The result would have been even weaker if bad debts had not stayed well below historical average levels.