Bank of Queensland shares are in a freefall after shock announcement to the market.
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Yet another employee underpayment crisis has struck, sending one bank’s shares tumbling on Tuesday.
Bank of Queensland Limited (ASX: BOQ) stock had dived 6.6% at the time of writing, to trade at $5.93. The shares were as high as $7.68 in February.
The freefall came as the company admitted an employee pay review uncovered “irregularities” in remuneration and superannuation payments.
BOQ announced it would charge an expense of $11 million to its 2020 financial year bottom line because of the discovery.
The amount consists of $2.4 million already paid to the Australian Taxation Office as part of the Superannuation Guarantee Amnesty. Another $8.6 million was reserved for future remediation.
“We will get this right and we will make sure our people, past and present, receive every cent they are owed. This is an absolute priority,” said BOQ chief executive George Frazis.
The Finance Sector Union of Australia (FSU) stated 750 employees were short-changed.
According to the union, it first raised concerns about missing super with BOQ 18 months ago.
“While that issue was resolved, it is disappointing that the bank failed to follow through and properly audit its payroll at the time,” the FSU stated.
This is wage theft: union
BOQ announced that it had appointed “third parties” to help with identifying and remediating underpayments.
FSU National Secretary Julia Angrisano criticised the delay in getting the backpay out to workers.
“It is not acceptable that staff are being forced to wait until March 2021 to have their correct pay reinstated,” she said.
“This is wage theft and we are calling on the Bank of Queensland to accelerate the repayment program to pay affected employees immediately.”
COVID-19 blows out BOQ’s impairment expense
The bank also flagged Tuesday that its financial year 2020 loan impairment expense would be $175 million pre-tax. That includes a $133 million COVID-19-related provision.
“The revised provision reflects the anticipated lifetime losses on the current portfolio relating to the impacts of COVID‐19,” said Frazis.
“We are very pleased to see many of our customers returning to work and re‐opening their businesses and will continue to work closely with those that require further assistance.”
BOQ’s 2020 financial year results will be revealed on 14 October.
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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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