The Bank of Queensland announced a special dividend after lifting full year cash earnings by 5% to $378 million.
The regional bank declared a fully franked final dividend of 38 cents, bringing the full year payout to 76 cents, flat on 2016. However, the company announced a special dividend of 8 cents.
CEO Jon Sutton says one of the most pleasing aspects of the result is the improved momentum in the second half.
“The second half largely played out as we said it would at our first half result,” says Sutton.
“Lending growth improved in both the housing and commercial loan portfolios. The Virgin Money Reward Me home loan portfolio has grown ahead of expectations.”
Lending grew by 2% or $700 million.
Sutton says the environment for banks is a dynamic one but the Bank of Queensland is well placed.
“We have seen return to growth in the second half which gives us confidence going into FY18,” says Sutton.
“The industry faces challenges of low housing credit growth, low interest rates, regulatory uncertainty, increasing consumer expectations and increased scrutiny of conduct and culture.
“We have responded well to these challenges and have been able to continue delivering our strategic priorities and returns for shareholders.
“Efficiency remains a key focus and we have embarked on a program to further improve productivity across the organisation.
“Our very strong capital position provides us with flexibility to consider options that will deliver the best value to our shareholders.”
Second half cash earnings after tax increased 16% on the first half result, supported by a $16 million profit on the disposal of a vendor finance asset.
Excluding the vendor finance disposal, 2017 cash earnings after tax increased 1% to $362 million and second half cash earnings after tax increased 7% on the prior half to $187 million.
Full year statutory net profit after tax was $352 million, up 4%.
The net interest margin was down seven basis points to 1.87% for the full year, but increased five basis points in the second half to 1.90%.
Operating expenses were down 1% from to $513 million.
Loan impairment expenses fell 28% to $48 million.
The 2017 numbers at a glance: