Bank of Queensland (BOQ) investor relations material

Executive summary

• Cash earnings for H1 2026 were AUD 176 million, down 4% year-over-year, reflecting margin compression and higher loan impairment expense, while underlying profit rose 2% year-over-year supported by revenue and expense growth from branch network conversion.

• Statutory net profit after tax was AUD 136 million, down 20% year-over-year, impacted by non-cash items including the equipment finance sale.

• The group advanced its digital transformation, with over 70% of active retail customers migrated to the digital platform and 75% of home lending originations processed digitally in March.

• A capital partnership with Challenger was established, including the sale of AUD 3.7 billion in equipment finance assets and a forward flow arrangement, enabling capital-light income and shareholder returns.

• Maintained strong liquidity, surplus capital, and sound asset quality.

Financial highlights

• Total income for H1 2026 was AUD 832 million, up 5% year-over-year, with net interest income rising 4% to AUD 755 million and non-interest income up 13%.

• Cash earnings after tax were AUD 176 million, down 4% year-over-year, and statutory net profit after tax was AUD 136 million.

• Net interest margin (NIM) for the period was 1.67%, with a stronger Q2 margin than Q1.

• Operating expenses increased 6% year-over-year to AUD 553 million, reflecting inflation, branch conversion, and digital investment.

• Loan impairment expense increased to AUD 20 million (5 bps to GLA), mainly due to a specific provision in asset finance.

• Fully franked interim dividend of AUD 0.20/share, a 75% payout ratio, up 11% year-over-year.

Outlook and guidance

• Home lending contraction is expected to ease, with a return to growth anticipated in FY 2027.

• Business lending is targeted to grow ahead of system in H2 2026.

• Sub-inflation cost growth targeted for FY 2026, with further productivity and simplification initiatives planned.

• Loan impairment expense expected to remain below long-run averages in the near term, though downside risks persist.

• Capital partnership with Challenger to complete by May, with released capital to be returned to shareholders via special dividend and buyback, subject to approvals.