Bank of Queensland (BOQ) announced on Friday that it expects a net profit decline of AUD 79 million (USD 50.8 million) in the second half of fiscal year 2023. This decrease is attributed to the costs associated with the company’s restructuring and its ME Bank acquisition.
The Australian regional bank outlined two factors that will impact its statutory net profit after tax for the period ending August 31. Firstly, BOQ will recognize AUD 50 million (AUD 35 million after tax) in noncash restructuring costs, which includes redundancy-related expenses, property impairments, and technology impairments incurred during a groupwide operating model review. Additionally, the integration costs of ME Bank will result in an AUD 44 million impact.
It is estimated that the redundancy-related costs of approximately AUD 25 million will affect around 250 roles across the organization throughout fiscal year 2023 and the first quarter of fiscal year 2024. BOQ stated that this restructuring effort aims to consolidate similar activities under a shared service model, reducing costs and aligning the bank with its targeted future operating state.
Regarding the property-related impairment costs, BOQ indicated that they amount to approximately AUD 11 million. This includes the consolidation of office space in Perth, Melbourne, Sydney, and Brisbane. The technology costs associated with the restructuring efforts are estimated to be around AUD 14 million.
In terms of the integration process for ME Bank, BOQ confirmed that the program was concluded in the second half of fiscal year 2023, with total costs falling within the guidance range of AUD 130 million to AUD 140 million. Of this amount, AUD 20 million (AUD 14 million after tax) was accounted for during this period.
BOQ further explained that, apart from the integration program, additional decisions were made based on the updated group operating model and technology roadmap. As a result, property integration and the decommissioning of legacy technology will lead to impairments of AUD 43 million (AUD 30 million after tax) in the second half of fiscal year 2023.
BOQ will release its fiscal year 2023 results on October 11.