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BOQ reveals redundancy costs ahead of FY23 results 

The non-major bank has disclosed $79 million of costs impacting its financial reporting, including restructuring and redundancy costs.

Ahead of releasing its group results for the 2023 financial year ended 31 August 2023, non-major lender Bank of Queensland Limited (BOQ) released a statement on Friday (29 September), disclosing $79 million of items impacting its statutory net profit after tax.

In the second half of FY23 (2H23), two main items impacted its finances:

  • Restructuring costs of $35 million (after tax).
  • Integration costs of $44 million (after tax) following its acquisition of Members Equity Bank Limited (ME).

The group stated that, within its restructuring costs, it would recognise $50 million ($35 million after tax) of non-cash restructuring charges. These include redundancy-related costs and property and technology impairments that BOQ incurred as part of a group-wide operating model review.

It revealed that the redundancy-related costs reached approximately $25 million and addressed approximately 250 impacted roles across the Bank of Queensland group in FY23 and the first quarter of FY24.

The group said: “This restructure brings like activities together under a shared service model, removing costs and aligning BOQ to its targeted future operating state.”

As an example of the group’s restructuring, earlier this year it appointed Johnny Lockwood into a newly created role of general manager broker, credit cards and loyalty for BOQ Group, part of a change to the structure of its retail distribution team.

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Mr Lockwood joined from BOQ group-owned Virgin Money and took over third-party chanenl responsibilities from Kathy Cummings (who had been in the role of general manager of BOQ Broker since 2019) and Christian York (who had headed up Virgin Money’s third-party distribution).

Property-related impairment costs of approximately $11 million, which included the consolidation of the group’s corporate office floor space by more than 14,000 square metres and technology costs of approximately $14 million made up the remaining restructuring costs.

The BOQ Group also confirmed that the ME integration program had been finalised during the second half of FY23, with the total scheme costing “within guidance of $130–140 million”, including $14 million after tax for 2H23.

The other $30 million in costs (after tax) for 2H23 were due to the group’s decision to further integrate property and decommission legacy technology, which included:

  • Accelerating the digital transformation of ME and transition into a single core-banking platform for the retail bank.
  • Consolidating the Melbourne property footprint and impairing a legacy ME property lease of $16 million, driven by high vacancy and low subleasing demand.

The BOQ group confirmed that it would hold a financial results briefing on Wednesday, 11 October 2023.

BOQ leadership restructure

In March this year, the BOQ group appointed its executive chairman and acting chief executive Patrick Allaway as its new managing director and CEO until the end of December 2024.

Mr Allaway stepped into the position in an acting capacity when George Frazis departed the group in November 2022.

At the time of the appointment, Mr Allaway said: “I am honoured to serve BOQ stakeholders in my new role and to play a part in our 150-year history. I will continue to lead by living our purpose and values and to progress our work to build an even stronger and better bank for our customers, our people, and our shareholders.

“Our focus is strong financial resilience whilst simplifying our operations and digitising for our future state. We have made material progress in strengthening our capital and liquidity position over the past six months and have maintained quality lending portfolios as we prepare for a more challenging economic environment.”

Given the change of Mr Allaway’s role, Warwick Negus became chairman of the board.

[Related: BOQ announces new CEO]

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