INCREASING bad debts saw the Bank of Queensland’s normalised cash NPAT crash by 41 per cent to $57.6 million for the first half of FY11.
The result was in line with guidance provided to the market earlier this year.
Outgoing Bank of Queensland managing director David Liddy (pictured) says the first half of FY11 had been adversely affected by a significant increase in bad debts.
“I’m disappointed with our bad debt experience and have dedicated significant resources in managing this area,” he says.
“On a more positive note, we have been closely managing the integration of the National Finance and Insurance businesses and I’m pleased to report that both are performing well and have been successful additions to the core banking business.
“Over the past six months and in the face of significant natural disaster, the bank has continued to drive growth through our owner-managed branch network, which is a huge accomplishment.”
Liddy says the bank’s bad debts have continued to grow, with underlying bad debts increasing to $134.4 million.
“We’ve seen an increase in underlying bad debts driven by impairment exposure and, to ensure transparency, we’ve tried to specifically book weather impacted exposures where we could identify them.
“We’re seeing early signs of normal business activity and settlements restored to pre-flood levels within two months and we haven’t changed our flood related provisioning since the February market update.”
Liddy has chosen not to extend his current contract, which expires at the end of the calendar year. The board has commenced a formal search for his replacement.
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