Bank of Queensland will defer paying dividends to shareholders after the Australian Prudential Regulation Authority urged banks to consider doing so due to the coronavirus impact.
The regional lender on Wednesday said it would defer a decision on paying its interim dividend until the economic outlook is clearer.
The decision comes as BoQ reports a 10 per cent drop in cash earnings to $151 million for the first half of 2020.
APRA on Tuesday asked banks to conserve capital and reduce dividends, given the uncertain economic outlook.
This would ensure banks could continue to lend and underwrite insurance.
Bank of Queensland chairman Patrick Allaway said the bank understood the impact of its decision on shareholders but APRA’s guidance was a prudent step.
The bank’s revenue was flat at $545 million for the six months to February 29, while expenses soared 31 per cent to $377 million, including $47 million in non-recurring expenses associated with its strategic review and restructure.
Statutory net profit dropped 40 per cent to $93 million.