Bank of Queensland (ASX:BOQ) has reported a 13% decrease in FY11 profit to $158.7 million, on impairments arising from an increase in bad debts.
The extreme weather conditions of earlier in the year and current fragile economic conditions contributed to a growth in bad debts to $200.5 million for the year.
But the situation, which had been foreshadowed in guidance issued in February, showed signs of improving in the second half. During this period, impairment charges fell $68.3 million sequentially.
Acting CEO Ram Kangatharan said that while the bad debts had taken their toll on the headline figures, underlying profit grew 18% during FY11, and 7.6% in the second half.
“In addition, we have invested in our collection process to address the bad debt performance and we anticipate these resources will improve our arrears performance in early FY12,” he said.
Kangatharan said the company's recent insurance and finance acquisitions have been successfully integrated into the business, achieving a payback of some $70 million of the $105 million capital deployed after 14 months.
Bank of Queensland's assets under management grew 3% in FY11 to $39.9 billion. The company announced a 2% higher full-year dividend of $0.54.
BOQ shares grew 1.38% on Thursday to $8.100.