Is Bank of Queensland in Crisis?

TanedaR on 15/04/2023 - 23:36

https://www.afr.com/companies/financial-services/more-questi…

TLDR:
CEO couldn’t really explain much when he was asked if the financial crimes regulator is investigating the bank.
Interim dividend is cut to 20¢ while BoQ claims it has made good progress in strengthening its financial resilience with strong capital and liquidity buffers.

Looks like some OZB members chase for high savings interest and prefer BoQ over others.
https://www.ozbargain.com.au/deals/boq.com.au

Let's guess who is the Australian Silicon. LOL

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Comments

  • deme on 15/04/2023 - 23:40
    +3

    https://www.apra.gov.au/financial-claims-scheme-0

    The Financial Claims Scheme (FCS) is an Australian Government scheme that provides protection to deposit-holders with Australian incorporated banks, building societies and credit unions (known as authorised deposit-taking institutions or ADIs), and general insurance policyholders and claimants, in the unlikely event that one of these financial institutions fails.

    The FCS is a government-backed safety net for deposits of up to $250,000 per account holder per ADI.

    relax

      • SBOB on 16/04/2023 - 08:15
        +5

        Btw $250,000 is close to nothing

        If you look at median savings data, that would mean almost everyone has close to nothing saved.
        So I guess there's no worry.

        And whose "easily" earning 250k on a stock market overnight ? That kind of person, with that kind of collateral isn't the target market for the 250k government deposit safety bet.

        • SBOB on 16/04/2023 - 10:17
          +4

          Shame you can now make posts that are clearly uninformed, idiotic, or debatable, and then just delete them later, meaning others don't get to share or oppose your viewpoints.

          • brendanm on 16/04/2023 - 13:02

            @SBOB: It is quite sad. Especially when being brought to you by the same person who drove around for hours to save $3 on their rego by paying in gift cards.

    • Muzeeb on 15/04/2023 - 23:52
      +17

      The FCS is a government-backed safety net for deposits of up to $250,000 per account holder per ADI

      Sufficient for whirlpool members but barely covers typical ozbargainers cash holdings.

      • Kangal on 16/04/2023 - 12:19
        +2

        The free OzBargain members, or the Premium OzBraggin Subscription members?

        • Muzeeb on 16/04/2023 - 12:25
          +2

          I'm talking platinum level at a minimum. I see you didn't renew this financial year. I hope everything is ok.

          • Kangal on 16/04/2023 - 12:28
            +2

            @Muzeeb: Lost it all with FTX, had to sell the High Yield Investment to pay for my rent increase and refinance my third apartment.

    • garetz on 16/04/2023 - 00:54
      -4

      What happens when millions of people lose their money, you think there is enough money in that scheme to pay everyone ? You are dreaming.

      The scheme is like an insurance policy, but it is not well funded, when the banks go bankrupt, the insurance companies will follow suit.

      • freefall101 on 16/04/2023 - 01:52
        +4

        If the Australian banking industry collapses to the point that millions are losing their deposits then there are bigger issues than trying to cover payouts.

        BoQ holds $60b in customer deposits. It's a lot, but the govt could cover that. But more to the point, they wouldn't need to. Even if BoQ has hit a similar liquidity crunch the govt would facilitate a buyout with a couple of billion, or do what they're doing - canning the dividend to prop up internal liquidity.

        This isn't America, where the banks can go full yahoo if they want to. Things are heavily regulated here and the regulators seem to have more idea of what the banks are doing than the banks themselves do.

        • dcep on 16/04/2023 - 02:16

          If the Australian banking industry collapses to the point that millions are losing their deposits then there are bigger issues than trying to cover payouts.

          You mean something like our housing market suddenly no longer worth $10T on their books ?

          • mskeggs on 16/04/2023 - 08:57
            +3

            @dcep: No something like a nuclear war or Last of Us.

          • freefall101 on 16/04/2023 - 11:54

            @dcep: The banking industry holds loans, not houses. If the housing market sinks, they’ll hold the exact same amount in loans.

            The banks would need to start losing hundreds of billions on loans. Which means millions of people are declaring bankruptcy. Which, again, is a bigger problem than trying to cover deposits.

            • dcep on 16/04/2023 - 14:18

              @freefall101: Happy days continue then.

              With house price over 10 times the wages, Australia is a miracle without housing crash over 30 yrs.

              1 can own over 5+ IPs and Big4s have 50% of their books on realestate loans. Keep the ball rolling.

              Do banks call in the loans on negative equity ? Or they simply don't revalue their books marked to market.

              • freefall101 on 16/04/2023 - 14:47

                @dcep: Housing prices will always wind up being a decent percentage of income, whether rent or mortgage payments. It's the way of life, people value their homes, it's a reflection of wealth, status and comfort. It will take something major to move that.

                The Big 4 having the loans on their books is actually a great thing. The crash in the US was because they were offering completely terrible loans, bundling them up into mortgage backed securities and selling them to someone else. Bye bye any responsibility for maintaining capital ratios, tier 1 capital or anything like that. And because they could package up even the worst of loans, it meant they were offering loans that made no sense, interest only loans to people who could never afford them. And the people who took up those loans were smarter than the banks, if the house value dropped lower than the loan value they could simply walk, leave the bank with a big gaping hole in their balance sheet and not repay any of that back. Negative equity on homes exists as a risk here, but having negative equity doesn't mean you get out of paying back the bank.

                Here in Australia there aren't enough homes, people cannot walk away from their home and leave the bank with the debt without declaring bankruptcy, and most people have actually invested tens of thousands (at least) of savings in their homes. They don't want to completely ruin their own lives. A housing collapse definitely isn't on the books unless we hit a major recession/depression and hundreds of thousands or millions cannot afford their houses. Even then investors would jump in once property dipped a little bit to cash in on the high rental prices and the RBA would drop interest rates very quickly to encourage it. The banks wouldn't really be hurt at all in the process.

      • Wintry Golem on 16/04/2023 - 09:14
        +2

        They will be forced to print and cover the guarantee. If somehow it doesn't happen, then all investment in Australia will collapse and since we already have a trillion dollar deficit (almost). Then I don't see how we don't go full banana republic in Australia since we don't really manufacture anything at all.

        The market forces could force Australia's minerals ultimately to be valued lower because of the banking risks involved with dealing with Australian companies. Venezuela is similar but different to many ways, but some would state it is the same because we don't refine ore here…

        If we actually went to do the analysis, we have so many things similar that it is freaky. The only thing we have is propaganda telling people to migrate here, but if that goes away, then we have nothing. Literally, underneath it all Australia is just another ordinary country that has no proper value added industry. We don't even have medical tourism.

        A majority take what we have for granted, but that is why Australia will suffer in the future.

        • deme on 16/04/2023 - 09:43
          +1

          Amounts paid under the FCS and associated administration costs would then be recovered through the liquidation process through a priority claim. Any shortfalls through the liquidation would subsequently be recovered by the Government through an industry special levy.

          https://www.apra.gov.au/financial-claims-scheme-protecting-d…

    • Stopback on 16/04/2023 - 09:32
      +1

      Imagine being without cash for one month.

      It would take some time

      • deme on 16/04/2023 - 09:41

        Go back to the Perth Mint, you just made up crap.

        Banks fail a lot in the US here is how it goes: https://www.youtube.com/watch?v=n_O1B_2tAlk

        https://www.apra.gov.au/financial-claims-scheme-protecting-d…

        What should I do in the unlikely event that my ADI or general insurer fails?
        In the unlikely event that the FCS is activated by the Australian Government, APRA has plans and protocols in place to ensure the timely payment of depositor funds or policyholder claims. For example, APRA will endeavour to make payments to the majority of deposit account holders within seven calendar days. In most cases FCS payment would be made by either cheque or electronically to an alternate account nominated by the account holder. If the FCS is declared, APRA and the entity will be communicating directly with depositors or policy holders on any steps that need to be taken in order to access their FCS payment.

        • Stopback on 16/04/2023 - 11:29

          No bank has failed yet.

          I don't trust and gov. To get it right. Again read my advice. Hens in a basket

          • deme on 16/04/2023 - 12:01
            +1

            @Stopback:

            Again read my advice.

            You didn't give any advice.

            I don't trust and gov.

            What's your plan

    • JIMB0 on 16/04/2023 - 15:27

      The government of the day still has to activate the scheme. Even then it's only limited to $20 billion per initiation.

  • deme on 16/04/2023 - 08:35
    +2

    Isn't this shitpiece from AFR talking about their stonk price?

    • mskeggs on 16/04/2023 - 09:01

      Yes, nothing to do with deposits.
      But I presume the tinfoil hat people on Facebook are going bananas about fractional reserve banking again, as they do from time to time to sell crappy silver coins and subscriptions to gold investment newsletters.
      Lots of people get conned by those people preying on their fears.

      • deme on 16/04/2023 - 09:02
        +2

        bitcoin is safer /s

      • dcep on 16/04/2023 - 11:12

        But Newcrest went from 15s to 30 over 6 months time, up +$13b on market cap as Newmont wanting to pay $30b for it.

        Is gold gonna break all time high with USD on demise from BRICS , etc. ?

  • Wintry Golem on 16/04/2023 - 09:10
    +1

    I'm looking to a poor earnings season from the banks if APRA is doing something behind the scenes. This is basically pseudo-speculative inside information we can use to trade.

    I would not be surprised if more and more earnings are required to be put away in light of what is probably an inevitable crash in property prices coming up. A lot of us with property are still holding on but eventually we will likely be burned as credit is not flowing as freely as it was a year ago.

    I'm also seeing a lot more properties sit on the market for 6+ months in inner sydney/inner west…

  • Daniel Plainview on 16/04/2023 - 11:34
    +6

    That BoQ has possible minor issues is one thing - but the OP equating them to SVB is just rampant scaremongering nonsense.

  • payless69 on 16/04/2023 - 12:14
    -2

    Who would even care if BOQ goes bust?
    No other bank would even considering looking at such a bad business model.
    No proper penetration to worthwhile markets!
    No proper app.
    No easy to understand fee structure.
    No proper offer to foster growth to all them kids accounts they have thrown money at.
    Why would a student stay loyal if youbank shows them how to bank or Combank shows smart kids how good CommSec has become.
    BOQ looks like a dusty antique store staffed by Woolies shelf stockers!

    • Kangal on 16/04/2023 - 12:22
      +2

      Explanation for those coming from public education?

      • payless69 on 17/04/2023 - 09:24

        You are right about bad public schools.
        In reality the vultures are sitting on the fence.
        When it gets worse the potential victim is an easier target.
        The 5 big ones are likely to poo over it, my bet is that ANZ is eventually making a move on a takeover bid.

      • payless69 on 21/04/2023 - 18:19

        check out today's share price!

  • Neoika on 16/04/2023 - 13:19

    Virgin Money is backed by BOQ.

    • payless69 on 17/04/2023 - 09:26

      One of the 16 Vestals has left for the coast.
      How many do you think will go for it?

  • randomusername2017 on 16/04/2023 - 18:22

    The end of the world is nigh.. first Myer now BOQ

    sky is falling too.. breaking news.. you heard it first on OzB slow dealday

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