Bank of Queensland (ASX:BOQ) cash earnings jump 83% in FY21

Bank of Queensland (ASX:BOQ) has reported solid cash earnings and an increase in its net interest margin for the year ending 31 Aug 2021, while expressing uncertainty for FY22.

Cash earnings jumped 83 per cent from the prior year to $412 million, while statutory net profit after tax jumped 221 per cent to $369 million. These results were driven by increased net interest income and a credit to loan impairment expense, partly offset by higher operating expenses.

BOQ’s net interest margin climbed 1 basis point to 1.92 per cent, and cash earnings per share increased 51 per cent to $74.7 per share. Total income for the year reached $1.26 biliion, an increase of 13 per cent from the prior year.

“Despite the uncertain environment, we are cautiously optimistic that Australia remains well placed for economic recovery, characterised by further house price rises and solid growth in consumer spending and business investment,” CEO George Frazis said.

The bank said that Covid-19 had made this another challenging year for them. “The lower unemployment rate was a sign that economic conditions improved for the nation and are well positioned to capitalise on greater consumer and business confidence from the vaccine rollout,” the bank said. 

BOQ declared a final fully franked dividend of $0.22 per share, bringing the FY21 dividend to $0.39 per share. This represents a 61 per cent payout ratio for FY21.The bank expect net interest margin to decline by 5-7 basis points in FY22, as competition continues and the low interest rate environment remains.

Shares in Bank of Queensland (ASX:BOQ) are trading 6.1 per cent lower at $9.13.