Bank of Queensland swings to loss
ABC News: Updated April 18, 2012 13:34:49
Bank of Queensland has announced a loss for the first half of the financial year due to a sharp rise in bad loans.
The bank reported a net loss of nearly $91 million, compared with a net profit of $48 million in the same period last year, as loan write-downs increased amid falling commercial property prices in Queensland.
The regional lender flagged the result last month, and announced it was planning a $450 million share sale to boost its bottom line.
But chief executive Stuart Grimshaw says there are positives to be found in the financial results.
"While this result was influenced by the increased provisionings of $328 million, there were still some positive signs to emerge such as the underlying profit being up 3 per cent to $222 million," Mr Grimshaw said.
BBY banking analyst Brett Le Mesurier says the bank made a mistake in changing its focus from residential lending to commercial loans and real estate.
"It looks like Bank of Queensland entered into areas for which it was not really well suited, and obviously they're addressing that now," Mr Le Mesurier said.
But Mr Le Mesurier says the cost of the loan write-downs will continue to affect the bank's results for some time.