Banks sector update: COVID-19 impact

By Azib Khan

19 March 2020, 11:45 AM

The spread of COVID-19 is posing a significant threat to the earnings outlook of the banks. Consequently, there is now significant earnings uncertainty over our forecast period. We have downgraded our cash EPS forecasts and dividend forecasts for all four major banks as a result of forecasting lower net interest margins, lower credit growth and more pronounced deterioration in asset quality.

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Bank of Queensland: Hamstrung

By Azib Khan

22 October 2019, 2:02 PM

BOQ’s return on tangible equity (ROTE) has now declined to 10.2% in 2H19. With such a low ROTE, the Company is not creating shareholder value from our perspective. If the decline in ROTE is not stemmed, then soon we may view the Company as diminishing shareholder value. We retain a Reduce recommendation.

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Bank of Queensland: Significant makeover coming up?

By Azib Khan

15 October 2019, 12:29 PM

Bank of Queensland (ASX:BOQ) is expected to report its FY19 result on the 17th of October. We continue to forecast FY19 cash earnings of $330m and a final dividend of 34cps fully-franked. We believe BOQ's underlying cash EPS growth will remain challenged relative to the major banks over the next couple of years. Our recommendation is downgraded to Reduce (from Hold).

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