Bank of Queensland Shares Jump 5% as FY26 Results Show Second-Half Recovery and Steady 20-Cent Dividend

SYDNEY — Shares of Bank of Queensland rose more than 5% on Thursday after the regional lender reported full-year results showing improving momentum in the second half, a steady final dividend and a sharp rise in statutory profit.

BOQ shares were up 33 Australian cents, or 5.09%, at 6.82 Australian dollars in afternoon trading, after reaching a high of 6.86 dollars. The stock had touched a low of 6.49 dollars earlier in the session. More than 2.5 million shares changed hands.

The gains came as the broader market recovered from an early sell-off after weaker-than-expected Australian jobs data cooled expectations for further interest rate increases.

Statutory profit surges

For the year ended Aug. 31, Bank of Queensland reported statutory net profit after tax of 250 million Australian dollars, up 88% from the previous year.

Cash earnings after tax, excluding notable items, fell 7% to 358 million dollars. The decline was driven mainly by higher loan impairment expense, which rose 157% to 54 million dollars from a low base of 21 million dollars a year earlier, and the absence of a 24 million dollar commercial lending write-back that boosted the prior year's results.

Including notable items, cash earnings were down 15% compared with both the prior year and the first half.

Second-half improvement

Investors appeared to focus on signs of improvement late in the year. Cash earnings rose 3% in the second half compared with the first half to 182 million dollars, supported by wider lending margins and disciplined cost management.

The bank's net interest margin, a key measure of lending profitability, rose 6 basis points from the prior year to 1.70%. In the first half, the margin had been 1.67%.

Commercial lending grew 16% during the year, supported by demand from sectors including health care and agriculture.

Dividend held steady

The board declared a fully franked final dividend of 20 cents per share, representing 72.9% of second-half cash earnings excluding notable items. That brings ordinary dividends for the year to 40 cents per share.

Including a 15-cent special dividend paid in August, BOQ returned 55 cents per share to shareholders during the year.

The bank said its dividend payout target remains 60% to 75% of cash earnings, and it kept its target range for its common equity tier 1 capital ratio unchanged at 10.25% to 10.75%. It also plans to complete its on-market share buyback in fiscal 2027.

The capital return program, announced in August, totaled about 295 million dollars, including the special dividend and a buyback of up to 196 million dollars.

Transformation complete

BOQ presented the results as marking the end of a three-year transformation that included major technology platform migrations, digital mortgage rollouts and a whole-of-loan sale.

The bank said it is now positioned to pursue disciplined growth.

Analysts cautious

Despite the rally, some analysts remain cautious. The 7% decline in cash earnings contrasts with stronger earnings resilience at Australia's major banks. Before the results, Morgans had downgraded the stock to hold, expecting a mid-single-digit decline in second-half earnings, and a consensus of analysts had a price target of 6.29 dollars, below the current share price.

The stock is down about 5.5% over the past year and has traded between 5.91 and 7.48 dollars over the past 52 weeks.

The final dividend goes ex on Oct. 27 and will be paid on Nov. 19. BOQ's annual general meeting is scheduled for Dec. 1.

Investors will watch whether the second-half improvement in earnings and margins can be sustained as interest rate uncertainty and competition for loans and deposits continue to weigh on regional lenders.