BOQ announces $91m loss; $450 equity raising


Bank of Queensland (BOQ) has announced a $450 million equity raising to strengthen the bank's Tier 1 capital position in response to an expected loss of $91 million for the six months to 29 February 2012.
The loss was contributed to by a downturn in Queensland tourism and in the commercial and residential property market, partly due to recent natural disasters in the state, BOQ chief executive Stuart Grimshaw said.
The $450 million equity raising would consist of an institutional placement to raise approximately $150 million, an institutional entitlement offer to raise approximately $135 million, and a retail entitlement offer to raise approximately $165 million, the bank announced.
The equity raising would strengthen the bank's Tier 1 capital ratio from 6.4 per cent to 8.6 per cent, fund organic growth opportunities and fund the redemption of the remaining $105 million Tier 2 convertible notes.
"This equity raising will strengthen our balance sheet and provide Bank of Queensland with the capacity for continued growth," Grimshaw said.
"The proceeds will be used to ensure Bank of Queensland is one of the best protected banks in Australia, with one of the highest Core Tier 1 capital ratios, while also allowing us to strengthen provisioning of our current loan book," he said.
The bank also announced a sightly increased underlying profit before tax of $222 for the half year, as well as a significantly increased impairment expense of $328 million, up from $134 million in the prior corresponding period.
Grimshaw said he expected conditions in Queensland to remain challenging over the next few years and a continuation of higher competition in the banking market.
Recommended for you
In this week’s special edition of Relative Return Insider, we bring you outgoing Financial Services Minister Stephen Jones’ keynote from Momentum Media’s Election 2025 event, followed by a Q&A focused on the Delivering Better Financial Outcomes reforms.
In this week’s episode of Relative Return Unplugged, Dr Vladimir Tyazhelnikov from the University of Sydney’s School of Economics joins the show to break down the shifting sands of global trade dynamics and attempt to understand the way US President Donald Trump is employing tariffs.
In this week’s special episode of Relative Return Unplugged, we present shadow treasurer Angus Taylor’s address at Momentum Media’s Election 2025 event, followed by a Q&A covering the Coalition’s plans for the financial services sector.
In this week’s episode of Relative Return Unplugged, AMP chief economist Shane Oliver joins the show to unravel the web of tariffs that US President Donald Trump launched on trading partners and take a look at the way global economies are likely to be impacted.