Insights

Bank of Queensland (ASX:BOQ) issues Capital Notes 2 as bank shares fall

Bank of Queensland Limited (ASX: BOQ) share price has dropped today after the bank announced the completion of its Capital Notes 2 offer.
The post Bank of Queensland (ASX:BOQ) issues Capital Notes 2 as bank shares fall appeared first on Motley Fool Australia. –

woman watching share prices and waiting

The Bank of Queensland Limited (ASX: BOQ) today announced the completion of its Capital Notes 2 offer. This has raised $260 million through the issue of 2.6 million Capital Notes 2 for $100 each. At the time of writing, the BOQ share price has fallen by 3.02% to $7.72, amid a broader fall in banking shares on the ASX today.

More about the bank’s Capital Notes 2 

The bank says strong investor demand saw the size of the offer increased from $250 million to $260 million. The note was priced at 3.8% above the benchmark BBSW (bank bill swap rate) paid quarterly, and the first payment in February 2021 has been fixed at 3.82%.

BOQ did not issue a statement today about the capital’s usage but in general, banks may issue capital notes to cover short-term financing – such as meeting minimum regulatory capital requirements under Basel Accords. Bank capital notes have no fixed maturity date, and are usually unsecured and subordinated.

The Capital Notes 2 are expected to begin trading on the ASX at approximately 10am Sydney time on 1 December 2020 under the ASX code “BOQPF”.

Quick take on Bank of Queensland

BOQ is smaller than its regional bank rival, the Bendigo and Adelaide Bank Ltd (ASX: BEN), and is considerably smaller than the four major banks.

After the recent CEO appointment of former Westpac Banking Corp (ASX: WBC) executive George Frazis, the bank said its strategic plan would centre on a digital transformation of its core banking offerings. It hopes this will lead to better operational cost efficiencies. The regional banks, including BOQ, usually struggle to compete with the four major banks on price, primarily because of higher wholesale funding and operational costs due to their lack of scale.

In October, the BOQ reported that its full-year 2020 cash profit fell 30% to $225 million. The drop was largely attributable to a $101 million rise in loan impairment expenses to $175 million. Statutory profit was reported at $115 million, reflecting amortisation of intangibles and restructuring. 

At that time, the bank also said that in 2021, it expects net interest margins (NIM) to fall by between 2 and 4 basis points, highlighting the cost cutting efforts made recently. It also said that 12% of its home loan book and 16% of its SME loan book were in deferral as at 31 August 2020, as the COVID-19 pandemic affected its customers’ ability to keep up with loan repayments. 

About the BOQ share price

The BOQ share price has gained 6% in 2020, and is now closing in on its 52-week high of $8.00. The bank’s share dropped to a 52-week low of $4.51 in May. The BOQ currently commands a market cap of $3.6 billion. 

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

The post Bank of Queensland (ASX:BOQ) issues Capital Notes 2 as bank shares fall appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!