Bank of Queensland (BoQ) has reported net profit for fiscal 2009 up two per cent on the prior year, and says its overall asset quality is sound.
BoQ said its net profit was $141.1 million in the year to August 31, after $138.7 million the year before.
Normalised net profit was $187.4 million, up from $155.4 million in fiscal 2008, the bank said in a statement on Thursday.
BoQ declared a final dividend of 26 cents fully franked, down from 38 cents fully franked in 2008.
The bank said its net interest margin had fallen by 11 basis points in the year, to 1.56 per cent, but it had picked up in the second half of the year, rising 7 basis points from the first half to the second.
"Our level of impaired assets has increased in line with the deteriorating economy and the banking sector, but overall our asset quality is sound," the bank said in its statement.
"We expect bad debts to peak in the coming financial year, but we have increased our General Reserve for Credit Losses to account for this and our losses to date are still tracking well below our larger competitors."
BoQ said lending grew 10 per cent from the year before, almost double the industry as a whole, while retail deposits increased 16 per cent, equal to system growth.
"We are a leaner, more robust bank than we were going in to the Global Financial Crisis and we now have a platform ready to strategically drive our continued growth forward," chief executive David Liddy said in the statement on Thursday.
"Not only did we achieve our earnings forecasts, we also again outpaced the vast majority of our competitors in terms of loan growth."
But profitability at the bank was hit by the financial crisis and higher cost of funding with the net interest margin declining to 1.56 per cent from 1.67 per cent the year before.
Normalised return on equity also declined to 11.8 per cent from 13 per cent and normalised diluted cash earnings per share fell 1.5 per cent to 98.4 cents.
BoQ was able to reduce costs relative to income, its cost-to-income ratio declining by 6.2 percentage points to 49.9 per cent.
"The cost disciplines we have put in place combined with our expanding revenue base have seen our cost-to-income ratio decrease," Mr Liddy said.
"These disciplines, combined with our funding and capital position, mean we are well placed to continue to grow in a challenging domestic and global economic environment."
The bank said its Tier 1 capital ratio was at 9.6 per cent, at the higher end of any Australian bank, following a capital raising in August.
Shares in BoQ were up 32 cents, or 2.6 per cent, to $12.65 by 1033 AEDT.
© 2009 AAP
