BANKING analysts have hit out at Bank of Queensland's surprise profit warning, questioning why it took the lender so long to discover worsening problems in its portfolio of loans to Queensland's troubled commercial property market.
The downgrade, coming on the eve of its annual meeting, also drew a mild shareholder rebuke when institutional investors used a vote on the bank's remuneration report to express their frustration. The non-binding vote is often used by shareholders to issue a protest vote. In BOQ's case more than 19 per cent of votes were against the report.
Over the past two years a clutch of lenders including Suncorp-Metway, St George and even Commonwealth Bank-backed Bankwest have been forced to revise up their lending losses mostly due to their exposure to Queensland's commercial property market.
Citigroup's Wes Nason cut his stance on BOQ to a ''sell'' from a ''hold'' and said it raised questions over BOQ's recent efforts to push into higher-risk business lines such as leasing and equipment finance.
The downgrade triggered a sharp sell off in BOQ shares yesterday. The stock ended down 5.5 per cent at $11.25, after earlier being almost 10 per cent lower.
On Wednesday BOQ blamed a review of its biggest Queensland commercial property exposures for a $20 million profit guidance cut - from $250 million to $230 million - that was issued two months ago.
The review of the bank's top 250 commercial property loans was prompted after loans to two shopping centres suddenly turned sour. The regional bank's impairment charges for the first half of its current financial year are now likely to come in as high as $90 million, well up on the previously forecast $53 million.
At BOQ's annual meeting yesterday, chairman Neil Summerson warned that business conditions in its home state remained tough. ''Most industry sectors in Queensland with the exception of mining and gas and their associated industries are suffering financially particularly the retailing and property development sectors,'' he said.
