Bank of Queensland (BOQ) has reduced its expected profit range for the 2011 financial year by $35 million after the flooding and cyclone that hit Queensland.
The drop in expected profit is not surprising given more than 60 per cent of BOQ’s business is in Queensland, with the bank now expecting profits somewhere in the region of $175 to $195 million.
Managing director David Liddy said BOQ had increased its provisioning levels for the first half of the year by $45 million as a result of a one-off management overlay due to weather-related factors and prevailing economic conditions.
“Given these one-off charges, the board may need to review the projected dividend growth,” he said.
Despite this, Liddy said he expected to see asset growth accelerate in the 2012 financial year as the rebuilding work in flood-affected areas gains momentum and conditions start to improve.
“In fact, we have earmarked an additional $2 billion for new lending for this rebuilding in Queensland in the next 12 to 18 months,” he said.
BOQ’s interim results and dividend will be released to the market on 14 April, 2011.
