Bank of Queensland announced 1H19 cash earnings of $167m which is below the downgraded guidance the company provided in February and 8% below the same time last year.
The result continues to highlight the struggles the regional banks have in the current environment.
An interim dividend of $0.34 was declared, which is a reduction from 2018 levels.
The chart below shows the Algo Engine sell signals in BOQ, starting in early 2018 at $13.00. BOQ now trades sub $9.00 and is likely to continue lower.
Bendigo reported earnings slightly below market consensus.
1H19 cash profit came in at $220m, however, we continue to see challenging conditions for the regional banks.
BEN and BOQ both display lower high formations and are under Algo Engine sell signals.
Our ALGO engine has shown a sell signal for BOQ since August 31st at $11.50.
The share price got a boost at yesterday’s AGM trading up to $11.35 just after the FY18 NPAT data was released.
However, as the trading day progressed, the lower margins on the current loan book combined with large software write offs pressured the share price back below $11.00.
We still prefer the short side of BOQ with a downside target of $9.60.
Bank Of Queensland
Our ALGO engine triggered a sell signal for BOQ on August 31st at $11.49.
Since then the share price has traded sideways to lower and has now broken a technical support level near $11.05.
BOQ will hold its AGM next Thursday, October 4th.
In addition to warnings about funding pressures and contracting margins, we also expect the bank to announce a $30 million restructuring charge during the meeting.
On balance, the combination of technical and fundamental weakness points to a return to the June lows near $9.60.
Bank of Queensland
Shares of BoQ are trading lower for the third consecutive day and are now pressing initial support at $11.00 in early trade.
Our ALGO engine triggered a sell signal on August 28th at $11.28. The “lower high” pattern was referenced to the intra-day high of $12.00 posted on March 12th.
BoQ has been the focus of several recent downgrades ranging from “under-perform” to an outright “sell.”
The main concerns for the profitability of bank going forward are the weakening credit growth and higher offshore funding costs.
We see the next area of support near the $10.70 level, followed by the $9.60 low posted in mid-June.
Bank of Queensland
BOQ has open the door for a full round of out-of-cycle rate hikes as the bank lifted its variable home loan rate and line of credit for both investors and owner-occupier loans.
Blaming rising funding costs, BOQ will raise both credit structures by 15 basis points effective July 2nd.
With the RBA standing firm on rates until at least Q3 2019, we don’t expect BOQ to be the only bank to snug rates higher on an out-of-cycle basis.
Our ALGO engine triggered a sell signal on BOQ on June 21st at $10.50. We maintain our negative outlook on the stock with a medium-term target near $9.40.
Bank of Queensland
Our ALGO engine triggered a sell signal for BOQ into yesterday’s ASX close at $10.50.
The “lower high” chart pattern is referenced to the $10.80 high posted on April 17th.
Recent chart rotation points to a medium-term low at or near $9.40. Investors looking to short BOQ can use our SAXO Go trading platform.
For more information on trading CFD products, call our office at 1-300-614-002
Bank of Queensland
It was announced today that BOQ and SUN will be forced to send executives to face questioning from the royal commission when hearings resume later this month.
According to Kenneth Hayne, the line of questioning will focus on lending practices to small businesses over the last 10 years, many of which were tipped into default.
Our ALGO engine triggered a sell signal in SUN on November 9th at $14.20. Since then the stock has traded as low as $12.60 and is now back in the sell-zone near $14.20.
BOQ shares pushed against resistance at the $10.50 level last week and we have a medium-term downside target of $9.60.
Our Algo Engine generated a sell signal back in February when BOQ was trading at $13.00. The stock closed yesterday at $10.66.
Bank of Queensland 1H18 earnings missed consensus by around 5%. Net profit after tax came in at $182 million and would have been much lower, if it was not for lower than expected bad and doubtful debt provisioning.
The result highlights quality concerns over underlying profitability.
With the stock trading on a 7%+ fully franked dividend, sell-offs will be met with some buying interest.
However, earnings headwinds and a down-turn in the credit cycle, suggests future “short” or sell signals from our Algo Engine are the preferred directional trades.
Bank of America reported a 34% rise in first-quarter profit last night, topping Wall Street estimates, as the bank benefited from higher interest rates and growth in loans and deposits.
However, BAC under-performed in fixed income, currency and commodities (FICC) trading because of a decline in bond issuance from corporations.
Trading revenue was up only 1%. Equities trading revenue, excluding items, rose 38%, while revenue from trading fixed income fell 13%.
BAC’s trading results mirrored those of rivals JP Morgan and Citigroup; revenue from stock trading rose at both the banks, but weakness in bond trading crimped total trading revenue growth, which is why their share prices remain soft.
To a large degree, the local banks face the same headwinds but with the added risk of the Royal Bank commission.
Hearings from the commission are back on this week with QBE and SUN included in the questioning over insurance related business practices.
Our ALGO engine triggered a sell signal late last year in both QBE and SUN at $10.40 and $14.05, respectfully.
We remain cautious of the local banking names and see the risk continue to be skewed to the downside, especially in the regional names like BOQ and BEN.