BOQ has endured an awful 2023 falling over -20% to date as it struggles with major operational issues such as mortgage and rising deposit competition plus higher wholesale funding costs have created an additional headwind i.e. it’s simply a tough environment for regional banks given they are sub-scale.
We can see further downside risks for the stock, despite the valuation being close to trough multiples, this could eventuate from negative surprises with possible remediation costs. MM also remains mindful of the normalizing credit cycle hence we still prefer large banks at this point in the cycle.
- We still have BOQ firmly in the too-hard basket.
MM is neutral towards BOQ
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