Reduced dividend remains for BOQ

Bank of Queensland will stick with its policy of paying out a lower proportion of profit as dividend, the bank's annual meeting in Brisbane heard yesterday.

Neil Summerson, the company's chair, told the meeting that "directors remained conscious of the over-riding need to preserve capital" over the year.

The bank cut its dividend by 26 per cent in the year to August 2009, in common with other banks over the last year or so.

Summerson, in prepared remarks for the meeting, published through the ASX, said a "conservative dividend payout ratio is appropriate while funding pressures remain."

The bank did not offer any update on the outlook, other than the generic observation that "economic data is pointing to more conducive trading conditions for the bank in 2010 than in the past 12 months."

There was plenty of  bleating - yet again - from Summerson and the bank's chief executive, David Liddy - over what they consider the unfair pricing of the fees payable to the Australian government for the guarantee of wholesale debt (and also on some deposit funding) that has helped maintain the bank's liquidity over the last year.

Summerson then went on to cite ample demand for one government-guaranteed BOQ bond sold in July as "a clear reinforcement of our credit standing in the debt markets."

He made no mention of the desultory demand for $1.1 billion in BOQ debt - even with the government guarantee - last week at a spread of 200 basis points over the bank bill rate for four-year funding.