Bank of Queensland reveals $91m first-half loss
Wednesday, April 18, 2012/
Bank of Queensland (ASX: BOQ) has posted a $91 million first-half loss, with the cost of bad real estate loans weighing on the lender.
BOQ had advised the market of an impending loss in a guidance report in March, when it launched a $450 million capital-raising to strengthen its balance sheet.
The loss was mainly due to heavy falls in property valuations and a 30% surge in BOQ’s non-performing loans, chief executive Stuart Grimshaw said in March.
“Increases in impaired assets are a result of a review of the bank’s commercial loan portfolio and the continued decline in commercial property prices in Queensland,” the company said in a statement to the ASX.
The loss for the six months to February 29 is a turnaround from a $48 million profit in the previous corresponding period – due to loan impairment costs of $328 million.
The Brisbane-based bank was forced to increase provisions for bad debts from $134.4 million in the first half to $327.7 million. This included $165.7 million in provisions for losses on troubled commercial property loans.
A further $162 million has been set aside for future bad debts amid concerns that more problems will emerge, according to the Australian Financial Review.
“Arrears appear to be stabilising and we are making good progress on managing our impaired assets,” Grimshaw said in a statement.