Bank of Queensland

Management were upbeat after reporting a strong result. The market expected the opposite, based on the theory that Queensland's economy was being brutalised by the continuing slump in the resources sector. CFO Anthony Rose explained that the QLD economy has been dealing with the thermal coal drag and a dramatic drop in public service jobs for well over 12 months. The delta change has been the positive impact the low A$ is having on tourism and export receipts. BOQ is also starting to see positive interstate migration driven partly by the gap between Sydney house prices and those in SE QLD. This month BOQ rolls out its mortgage broker IT system and this should add support to a sales channel with strong momentum. The share price has bounced recently, but on a PE of 12.7 and with arguably more growth potential than some of the majors, Bank of Queensland still looks like fair buying.