BOQ is attempting to reinvent the wheel before it is too late as it looks to unwind its franchise model, which has been in place for over 20 years, with over 8% of staff set to lose their jobs. The combination of online banking and margin compression has weighed on the QLD business, which is way behind its bigger rivals from a technological perspective. Mergers such as ANZ’s purchase of Suncorp’s bank have left the smaller BOQ even further out in the cold, and perhaps BOQ is trying to present a leaner picture for a potential suitor or partner moving forward.
- BOQ is one bank analysts have got right in 2024, with 2 Strong Sells, 10 Sells, 1 Hold and one solitary Buy.
The stock fell almost 6% on Thursday following the announcement, as the markets were concerned about how easily and efficiently BOQ can implement these new plans and a questionable outlook if it tries to sail alone. BOQ’s dividend is forecast to slip to 34c fully franked this year, from 41c in 2023, and this could prove to be a dangerous “dividend trap”, in our opinion. BOQ remains a standout loser in terms of return on equity (ROE) compared to its peers, and we see no reason to change our stance towards BOQ adopted through 2024.
- We see no reason to buy BOQ with CBA around $136 still offering more attractive risk/reward, but there will be a time that BOQ comes back on our radar.
MM is neutral towards BOQ at best
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