Bank of Queensland H1 cash earnings up 9pc

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Bank of Queensland has posted increases in first-half cash earnings and profit, and says its retail business has improved through a growing number of home loans.

The bank on Thursday reported cash earnings after tax rose nine per cent to $165 million.

Net profit after tax surged by 66 per cent to $154 million.

The bank improved its loans portfolio by $1.06 billion, of which $997 million was housing.

The improvement in home loans was accelerating, the bank said, and greatly helped the retail business.

The Reserve Bank has encouraged record low interest rates to help Australians spend their way out of the economic downturn from the pandemic. Many have taken advantage in the property market.

Meanwhile, Bank of Queensland chief executive George Frazis said the purchase of ME Bank would be completed by the end of the financial year.

The Queensland bank in February said it would buy ME for $1.32 billion.

Ratings agency S&P said the bank's improving profitability would help it meet the costs of integrating ME Bank.

S&P analysts said they expected earnings to improve for the next two years.

The bank would also be helped by reduced credit losses, they said, when compared with those suffered in the second half of fiscal 2020. The latter losses arose from the coronavirus pandemic.

In its outlook, the bank said economic outlook appeared more positive.

The bank said the COVID-19 vaccine would help the economy further improve and add to consumer confidence.

Company leaders are also working on progressing the Virgin Money digital bank, which began trading last month. The Virgin bank will offer more services including home loans.

Shareholders will receive an interim payout of 17 cents per share, fully franked. This is more than the previous fully franked interim dividend of 11 cents per share.

Shares were lower by 0.39 per cent to $8.86 at 1501 AEST.