Everything you need to know about the Bank of Queensland’s increased dividend
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Owners of Bank of Queensland Ltd (ASX:BOQ) Stocks benefit today. Not only are shareholders getting an increase in the value of their shares (with BOQ’s share price currently up more than 7%), but ASX Bank’s stock has also announced a bigger dividend in its earnings. FY22.
BOQ said the result, which saw statutory net profit after tax (NPAT) rise 15% to $426 million, reflected “good business momentum, contained costs and improved portfolio quality”.
Let’s see how much better the payout is.
BOQ FY22 dividend
The bank’s board of directors has decided to declare a final ordinary dividend per share of 24 cents. This is a 9% increase from the first half of FY22. It also represents a dividend payout ratio of 64.7% of cash earnings.
BOQ said its cash earnings per share (EPS) rose 5% to 78.4 cents per share for the year. The increase is the result of higher underlying net profit after tax and the benefit of a full year of earnings from ME Bank.
The bank’s board increased the annual dividend by 18% to 46 cents per share. This represents 58.7% of full-year cash EPS.
Not only did the higher earnings support the larger dividend, but BOQ also highlighted its Common Equity Tier 1 (CET1) ratio of 9.57%, making it “unquestionably strong”.
How big will the FY23 payout be?
The board has told investors that its target dividend payout ratio range is between 60% and 75% of cash earnings.
However, BOQ cautioned that the amount of any dividend paid will be at the discretion of the board of directors and will depend on several factors – generation of profits, having cash to distribute, expectations of future profits or when the projected timing of capital demands of the company allows it. for a “prudent” distribution to shareholders.
But, in terms of earnings, in its forecast, ASX Bank’s share highlighted a number of bright spots that could lead to “sustainable quality profitable growth”. This could be helpful for BOQ dividend growth.
BOQ expects market credit growth of 3.5% in housing and 6.5% in business. The bank expects growth to outpace the market, maximizing margin, revenue and returns. There is clear growth across all of its brands, both retail and enterprise.
ASX Bank’s share also pointed to positive momentum in its lending profitability, driven by tailwinds from higher interest rates, partly offset by headwinds in wholesale funding.
But inflation and investment in building a digital bank have cost headwinds. This will be partly offset by the benefits of simplification and integration.
BOQ expects positive jaws, i.e. revenue growing faster than expenses.
BOQ dividend yield
Using the 46 cent payout for FY22, Bank of Queensland has a premium dividend yield of 9.1% at the current BOQ share price.