BOQ – 7.44%: Another poor result for BOQ with FY23 results around 4% below consensus in terms of underlying cash earnings ($450m), which was down 13% vs. FY22 and continues to highlight ongoing issues with this subscale franchise, albeit, this was not a surprise. Margins remained under pressure (NIM 1.69%) which contracted a further 21bps on the half. The dividend of 21cps for the half took the FY23 dividend to 41cps, inline with expectations and represented a 71% payout of cash earnings for the half (60% for FY23). While their strategy remains clear on driving digital transformation to improve competitiveness and per unit operating efficiency, this is easier said than done, particularly in an environment of heightened regulatory scrutiny.
- BOQ looks very cheap on just 0.7x book and 9.1x earnings, but it’s cheap for a reason with more challenges to navigate.
MM remains neutral towards BOQ
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