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Bank of QLD reveals $175m FY loans expense

Steven Deare
·2-min read

Bank of Queensland expects to book a $175 million expense from bad loans, mostly due to COVID-19, for the full year.

The pre-tax figure will include $133 million attributed to the economic impact of the pandemic after some borrowers lost work and struggled to make repayments.

The bank had set aside $10 million in the first half of fiscal 2020 and $123 million for the second half.

The estimates were based on economic forecasts and assumed higher unemployment, lower property prices and an extended economic downturn.

The bank said it was helping customers who are struggling.

12 per cent of its housing loan customers, whose loans were worth about $4 billion, were on support arrangements as of August 31.

16 per cent of small and medium-sized business customers, whose loans were worth about $2 billion, were on similar arrangements.

Shaw and Partners senior analyst Brett Le Mesurier said the COVID-19 provision looked low in view of the customer figures.

The broker expects bad debt charges to rise this financial year to $230 million.

It also expects the final dividend to be three cents per share, from a previous final dividend of eight cents per share.

Also impacting the full-year results will be an $11 million pre-tax expense from the under-payment of employee wages and superannuation.

This follows a string of high-profile under-payment scandals from companies including the Commonwealth Bank, Qantas and Woolworths.

Bank of Queensland said it reviewed payments in light of these issues.

It has already paid $2.4 million in superannuation to the Australian Taxation Office.

The bank's results, for the full-year to August 31, are due on October 14.

The bank's shares were trading down 6.85 per cent at $5.91 at 1457 AEST.