Record BOQ annual profit grows 42%

By: Bank Of Queensland  14-Oct-2005

Bank of Queensland today announced an increase in Net Profit After Tax (NPAT) of 42% for the 2005 financial year based on achieving key revenue objectives, strong retail growth and the sale of its wholly-owned subsidiary ATM Solutions Australasia. Bank of Queenslands NPAT for the 2005 financial year was $91.7 million, up from $64.5 million last year. Chairman Neil Roberts said the Board had approved a second half dividend of 25 cents per share, fully franked, bringing total ordinary dividends to 48 cents a share, up 12% for the year. The Board also decided to pay a fully-franked special dividend of 15 cents per share as a result of the successful sale of the ATM Solutions business, which contributed $15.5 million to net profit after tax. The 63 cent total 2004/05 dividend is an increase of 47% on last years dividend. We want shareholders to benefit from the successful management and growth of the Bank, Mr Roberts said. The special dividend reflects the entire profit after tax generated by the sale of ATM Solutions. Shareholders have also benefited from a growth in Cash Earnings Per Share (diluted) of 30% to 84.1 cents in the year. Once again Bank of Queensland has achieved strong profits while maintaining rapid growth and building a business for the future, he said. Managing Director David Liddy said Bank of Queenslands underlying profit had grown 34% from $106.9 million in 2004 to $143.5 million this year and NPAT excluding significant items had grown 24% from $61.7 million to $76.2 million from 2004 to 2005. Significant items included the sale of Cashcard in 2004 and the sale of ATM Solutions Australasia in 2005. Normalised cash EPS rose 14% excluding significant items to 70.2 cents on the previous year. Mr Liddy said 2005 had been a year of achievements by the Bank, including: Substituting monthly sales volumes from the mortgage broker channel with the interstate branch network by year-end;Improving net interest margins from 2.25% to 2.30% in a tough market; Growing branch network to 173 (177 today), including 34 (38 today) in NSW, Victoria and ACT;Producing strong lending and deposit growth in the interstate branches;Producing double-digit normalised cash EPS growth of 14%;Selling ATM Solutions for a net profit after tax of $15.5 million;Strong deposit growth and market-leading product launches; and,Significantly growing its Business Banking division, particularly the equipment finance business. Bank of Queensland is now a very strong business model built on a growing retail network and strong business banking and commercial growth, Mr Liddy said. Importantly, we have continued to see strong results from our interstate branches, which, by year end, had achieved the monthly lending approvals previously sourced through mortgage brokers. Consequently, our intention over the next 6 to 12 months is to move into other states. We have assessed the markets in those states and will make a decision based on the same criteria we have used to date matching exceptional owner managers with good sites in growth areas. These new interstate branches will be supported by the existing ATM fleets and equipment finance offices in each state. Our first five interstate branches have now been open 12 months and have average footings, thats loans and deposits combined, of more than $50 million. Thats an exceptional result in 12 months from a new entrant into the New South Wales and Victorian markets, and gives us confidence about taking the owner-managed branch network into other growth markets in Australia. The Bank of Queensland model has proved itself in Queensland, and in the very tough New South Wales and Victorian markets, so a broader national reach is strategically and operationally appropriate. Mr Liddy said he was also happy with the pace of the branch roll-out, although it was unlikely Bank of Queensland would meet its initial target of 100 interstate branches by August 2006. Bank of Queensland has undertaken one of the fastest retail roll-outs in the country, with 31 new branches since August last year and 84 new branches in the last four years. We have grown from 93 branches just in Queensland in 2001 to 177 branches today, including 22 in New South Wales, 14 in Victoria, 2 in the ACT and 139 in Queensland. However, due to a higher concentration of metropolitan branches than expected, we have encountered some issues interstate around development applications and site selection in metropolitan areas which have slowed the process, Mr Liddy said. Our Owner-Managed Branch model is based on a combination of the owner-manager and the site, and we have been delighted with the quality of owner managers wishing to open branches in major metropolitan areas in Sydney, Canberra and Melbourne. To ensure our success continues, we will not sacrifice the quality of the owner-managers or the sites for new branches in the interests of expediency. So, if it takes longer to reach the 100 interstate branch mark, so be it. Provided tho

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