In a market that is not a fan of financial firms, Stock Specialist’s recommendation Bank of Queensland has rallied over 11% today, ending the day trading at $7.59 per share.
Despite the fact that that Bank of Queensland announced a 5% loss in cash earnings, the market rallied heavily for cheap BOQ shares. The primary reason for the decline, however, was due to a 12 basis point reduction in the company’s net interest margin. This has contributed to an increase in competition between the vast majority of financial institutions, the big four banks being the most volatile to it.
Despite the apparent negativity in financial stocks, Gold Sachs stated:
“The highlight of the result was that BOQ’s 4Q22 NIM came in at 1.81%, well ahead of the 1.75% 2H22 average, and also our FY23E forecast of 1.78% and Visible Alpha Consensus Data forecast of 1.75%.”
To our income investors, BOQ has also increased its final ordinary dividend to 24 cents per share. BOQ declared that its EPS increased by 5% to 78.4 cents per share for the year. The uplift was the result of higher underlying net profit after tax and the benefit of a full year of ME Bank earnings.
The bank’s board increased the full-year dividend by 18% to 46 cents per share. That represents 58.7% of full-year cash EPS.