Bank of Queensland Limited has announced a A$79 million hit to its full-year profit. In Friday's announcement, the bank said “restructuring costs” would reduce net profit by $35 million, while “ME integration costs” would be $44 million. The restructuring costs include redundancy related costs and property and technology impairments incurred as part of a group-wide operating model review.  “The review forms part of the group’s strategic simplification and digital transformation, focusing on addressing BOQ’s complex operating structure and operating costs,” the bank said. Included in the restructuring costs are redundancy costs of $25 million associated with a transition to a shared service model. Property-related impairment costs are $11 million, following consolidation of BOQ’s corporate office floorspace by more than 14,000 sqm. This includes the consolidation of office space across Perth, Melbourne, Sydney and Brisbane. There are also technology costs of $14 million “associated with the decision to impair intangible assets, aligned with our digital roadmap”. BOQ told shareholders “the ME integration program was finalised during 2H23, with total program costs delivered within guidance of $130 to 140 million including $14 million after tax for 2H23.   “Outside of the program, and on review of the updated group operating model and technology roadmap, additional decisions have been made to further integrate property and decommission legacy technology resulting in impairments of $30 million after tax in 2H23.”  These decisions include “accelerating the digital transformation of ME and transition onto a single core-banking platform for the retail bank.  “This resulted in an impairment of the ME core banking intangible asset of $27 million; and consolidating the Melbourne property footprint and impairing a legacy ME property lease of $16 million, driven by high vacancy and subsequent low sub-leasing demand.” Targeted annualised synergies of $72 million from ME integration “were delivered by the end of FY23, of which the final $25 million were delivered in FY23” BOQ said.  “These synergies were achieved through alignment of operating models and technology integrations."

Bank of Queensland is preparing the market for an ordinary full-year profit when the bank reports next Wednesday, for the year to August 2023.

Over FY2022 BOQ reported a net profit of $426 million. But iover the half year to February 2023, after a $200 million goodwill write-off and expensing of $60 million for a risk management program, it managed a profit of a mere $4 million.