The struggling Bank of Queensland is hopeful that interest rate cuts and a recovery in its home state property market will help restore earnings.
The 138-year-old Brisbane-based lender has become the first Australian bank to suffer a loss in two decades.
But a month after revealing a $17 million annual loss for the year to the end of August, chief executive Stuart Grimshaw predicted the worst was over for Queensland's sluggish housing market.
"We've seen signs that it's bottomed and there have been a few good sales on the Gold Coast, Sunshine Coast and even Cairns," Mr Grimshaw told reporters in Brisbane on Thursday after the bank's annual general meeting.
Queensland makes up 60 per cent of the bank's loans and was also where $401 million in costs were incurred from unrecoverable loans.
Mr Grimshaw was hopeful of possibly four interest rate cuts in 2013, taking the cash rate below its record low of three per cent.
The chief executive also stood by his $1.8 million remuneration package, which included a $484,000 bonus.
"I wouldn't say it was controversial," he said.
"When you're a CEO, you're going to be subjected to questions and prodding but the one thing shareholders do understand is the 24-hour day job, seven days a week."
Mr Grimshaw, however, will be subjected to a pay freeze for 2012/13, which will apply to any employee earning more than $100,000 a year.
"In this environment where revenue growth is very low, productivity is the key and productivity and cost lines are things you've got to look at very, very tightly," he said.
Earlier, chairman Neil Summerson told shareholders that while the Australian economy's performance was patchy, the bank expected to bounce back from its losses.
"...we are expecting to deliver growth in top and bottom line and after the first three months of this financial year we are comfortably meeting our internal targets," he said.
The chairman said the Bank of Queensland was committed to expanding its presence in Western Australia, with Mr Grimshaw adding loan brokers would be trialled in the state early in 2013.
The chief executive also told shareholders that asset growth was in line with expectations, while bad and doubtful debts matched internal estimates.
Mr Summerson told the meeting he was disappointed with the company's share price, which was trading at $8.05 in early December 2011.
Bank of Queensland shares fell six cents to hit $7.17 at 2.18pm AEDT.