Bad debts from small- to medium-sized businesses have peaked, according to the Bank of Queensland.
Despite its bad debt rising 58% to $104 million in 2009/10, David Liddy, Bank of Queensland’s CEO says BOQ remains positive about the outlook of SME lending in future.
“As per guidance we have experienced an increase in bad debts expense during the year and, as a result, we have increased our provision coverage,” he says.
“Some positive trends are emerging and our focus remains on well-secured housing and SME lending.”
BoQ claims to have continued to finance SMEs throughout the global financial crisis. Liddy says this has proven successful for the bank.
“The bank maintained an exceptionally strong level of capital and liquidity throughout the year, which will enable us to capitalise on growth opportunities that are expected to progressively unfold going forward,” Liddy says.
BoQ profits soared to $197.1 million for the 2009/10 financial year, with Liddy optimistic that things can only improve.
“As per our guidance, we expect that bad debt losses have peaked in FY10, however we also expect that investments in collection processes and resources will improve specific portfolio performance.”