Bank of Queensland's risk management undertaking will increase cost - Macquarie

Bank of Queensland

01/06/2023 01:17

** Bank of Queensland Ltd's  BOQ.AX  undertaking with the
country's financial crime and prudential regulators to prepare a
risk management plan expected to result in additional cost
growth - Macquarie  
    ** Brokerage cuts PT to A$5.70 from A$6.15 and lowers EPS
estimate by ~0-3% for FY23-FY25 after incorporating higher cost
growth
    ** BOQ entered separate undertakings with the Australian
Competition and Consumer Commission (ACCC) and Australian
Prudential Regulation Authority (APRA) to comply with anti-money
laundering and counter-terrorism financing laws and address risk
governance practices
    ** Despite APRA's ~A$50 mln ($33.92 mln) add-on charge,
reducing BOQ's common equity tier 1 ratio by 17 basis points,
Macquarie believes the bank remains well capitalised
    ** Analysts at Morgan Stanley think BOQ should prioritise a
remedial action plan after the enforceable undertakings with
APRA and ACCC
    ** The plan would need lifting co's A$60 mln provision for
strengthening its risk management - MS
    ** Of 15 analysts, 2 rate the stock "buy", 7 "hold" and 6
"sell" or lower; their median PT is A$6.30 – Refinitiv data
    ** Stock down 20.7% this year, as of last close

($1 = 1.4743 Australian dollars)

 (Reporting by Poonam Behura in Bengaluru)
 ((Poonam.Behura@thomsonreuters.com;))