Bank of Queensland Ltd (ASX: BOQ) $6.83
BOQ's update yesterday had more to like than Westpac's, but the underlying message was similar. Management announced a ~$295 million capital return via a special dividend and buyback, but also flagged a $47 million impairment charge and softer-than-expected net interest income. Importantly, while BOQ avoided making explicit comments on the housing market, its decision to return excess capital rather than deploy it into loan growth suggests it sees limited opportunities in a slowing mortgage market. With almost 74% of its loan book exposed to residential housing, the result reinforces the view that earnings growth for Australian banks is likely to remain constrained by weaker credit demand and ongoing margin pressure.
