BOQ 2019 Financial and Sustainability Performance Analysis

This report provides an in-depth analysis of the financial and sustainability performance of the Bank of Queensland (BOQ) for the year 2019. It begins with an executive summary highlighting the key aspects of BOQ's performance, followed by a company background overview. The financial results section reveals a decline in profits due to increased operating expenses and economic slowdown. The report details the decrease in cash earnings after tax, net profit, and dividends per share, while also noting an increase in operating expenses. Despite these challenges, BOQ is investing in Virgin Bank Australia and restrategizing for revenue growth. The report also assesses BOQ's sustainability efforts, including its alignment with UN Sustainable Development Goals, employee engagement, and environmental impact metrics such as energy and fuel consumption. While the report acknowledges BOQ's commitment to corporate social responsibility, it also points out limitations, such as the lack of auditor comments on the sustainability report and a decrease in Aboriginal employee representation. The conclusion summarizes the findings, highlighting both the positive aspects of BOQ's financial and sustainable practices and the areas needing improvement. The report includes references to relevant literature and an appendix with key financial and sustainability data.

NON FINANCIAL
COMPANY

TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................3
COMPANY BACKGROUND........................................................................................................3
FINANCIAL RESULTS.................................................................................................................3
SUSTAINABILITY........................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6
APPENDIX......................................................................................................................................7
Details of BOQ............................................................................................................................7

EXECUTIVE SUMMARY
The analysis of the financial and sustainability performance of the company is critical in
identifying what are the key aspects or points on the basis of which performance of the company
can be evaluated. In the report prepared on Bank of Queensland, the financial performance of the
company along with the sustainability performance of the company for the year 2019 was
evaluated and it was identified that financial data was more reliable in comparison to the data
provided under the sustainability report. The appendix will include the figures related to different
financial and sustainable points of report that have been presented by BOQ.
COMPANY BACKGROUND
The Bank of Queensland is the Australian Retail Bank that operates through 252 branches
spread all over the Australia. The bank mainly deals in the consumer and commercial banking,
mortgages and loans, credit cards, finance, and lastly insurance. The BOQ has been in operation
since 1863 and the consumer satisfaction rate with the performance of bank is as high as 88%
(BOQ, 2020).
FINANCIAL RESULTS
As per the details published in the Annual report of BOQ, it can be identified that the
financial performance of the company was not as per the expectations and the figures of profits
have declined as compared to those of past years. The major reason to which this decline can be
credited is due to the increase in the operating expenses and slow down in the economy overall
(Qiu, Shaukat and Tharyan, 2016). It was identified that the cash earnings after tax have
decreased by an estimated 14% in comparison with the year 2018 (2019 Annual Report, 2019).
Further, as it can be quoted from the details included in the template attached in the Appendix,
the Net profit was found to have declined to $298 million in year 2019 as compared to $336
million in year 2018. The rate of dividends on ordinary share which was 76 per ordinary share
had further declined to 65% per ordinary share. In addition to this, while taking into
consideration the expenses aspect, it can be adequately concluded that the operating expenses of
the company increased by an estimated 4% and this has drastically affected the cost to income
ration o the company taking it up to a higher notch of 50.5% (2019 Annual Report, 2019).
Therefore, it can be said that the overall financial position of the BOQ has declined in the year
2019.
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However, the company is planning to make significant investments particularly in the Virgin
Bank Australia and restrategizing the targeted segments by the year 2020 which is intended to
make the company BOQ stronger (Reguera-Alvarado, de and Laffarga, 2017). The management
of the company expects that due to better investments, the company will be able to generate
higher revenues by the end of FY 2020 where the higher compliance to regulations, the increased
investment, increased interaction with technology and more transparent and clearer benchmarks
will be the major factors for improving the revenue.
The ethical grounds on which the company is operating has been concluded to be strong
where the compliance to New Banking Code of Practice, Consumer Data Right Bill, Modern
Slavery Act, revised framework for ADI’s shows that the company has been operating in
accordance to the older and newer laws and regulations that are being passed in Australia
(O’Neill, Sohal, and Teng, 2016). The auditors of the company i.e. KPMG, have further
concluded that the entire audit of the organisation was conducted in accordance with the
Australian Auditing standards and the valuation of the financial statements on which the reports
have been developed are accurate and reliable along with realistic valuation of goodwill as well.
SUSTAINABILITY
In accordance with the Sustainability Development Goals presented by UN, the company
has developed adequate strategy for the next 12 months where they will be aligning their efforts
and resources towards the achievement of gender equality, decent work and economic growth,
reduced inequalities, and sustainable cities and communities in the year FY 2020 (Schaltegger
and Wagner, 2017). The four broad themes that company has worked upon in the FY 2019 are
conduct and trust, customer experience, adapting to change and lastly workplace culture.
The sustainability report of the company clearly depicted that the employee engagement
with the company increased from 53% in year 2018 to 56% in year 2019. Another aspect of
sustainability of the company can be ascertained from the fact that the percentage of employees
belonging to Aboriginal & Torres Strait Islander people constitutes 0.8% of the total employee
workforce. However, questions can be raised on the fact that it has decreased from the data
recorded in FY 2018 where it was 1% of the total workforce (Abdul-Rashid and et.al., 2017). As
per the details compiled and presented in the template attached in the appendix, it can be further
identified that electricity consumption of the company has decline from 4102 in 2018 to 4082 in
2019, air travel has also reduced from 13467 in 2018 to 12510 in 2019 and the fuel consumption
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for work vehicles was also ascertained to have declined from 122 in FY 2018 to 121 in FY 2019
(2019 Sustainability Report, 2019).
The concept of Corporate Social Responsibility is undertaken by the companies as an
attempt to refurbish or repay to the societies, culture and nature from which the company is
extracting so many things in order to keep operating. The CSR duties are important, compulsory
and relevant for all the firms as per the Australian regulations and in accordance with that the
BOQ is also undertaking CSR activities through different measures and in different areas
(Wijethilake, 2017). Unfortunately, the auditors comment cannot be evaluated here because the
KPMG which was identified as the main auditor has been involved only with the audit of
financial reports of BOQ and not with the other information provided. They clearly state that the
other information is provided at the discretion of directors of the company only.
CONCLUSION
The research therefore concludes that the performance of BOQ in terms of financial and
sustainable aspect is well justified where they are working as sustainably as possible and profits
re not being earned on the cost of their customers. However, there were some issues as well that
were identified in the report i.e. the lack of comment of auditors on sustainability report, the
decrease in the percentage of aboriginal employees and declining shareholders dividend as well.
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REFERENCES
Books and Journals
Abdul-Rashid, S.H., and et.al., 2017. The impact of sustainable manufacturing practices on
sustainability performance. International Journal of Operations & Production
Management.
O’Neill, P., Sohal, A. and Teng, C.W., 2016. Quality management approaches and their impact
on firms׳ financial performance–An Australian study. International Journal of
Production Economics. 171. pp.381-393.
Qiu, Y., Shaukat, A. and Tharyan, R., 2016. Environmental and social disclosures: Link with
corporate financial performance. The British Accounting Review. 48(1). pp.102-116.
Reguera-Alvarado, N., de Fuentes, P. and Laffarga, J., 2017. Does board gender diversity
influence financial performance? Evidence from Spain. Journal of Business
Ethics. 141(2). pp.337-350.
Schaltegger, S. and Wagner, M., 2017. Managing and measuring the business case for
sustainability: Capturing the relationship between sustainability performance, business
competitiveness and economic performance. In Managing the business case for
sustainability (pp. 1-27). Routledge.
Wijethilake, C., 2017. Proactive sustainability strategy and corporate sustainability performance:
The mediating effect of sustainability control systems. Journal of environmental
management. 196. pp.569-582.
Online
2019 Sustainability Report. 2019. [ONLINE] Available through :<
https://www.boq.com.au/content/dam/boq/files/shareholder-centre/financial-results/
2019/sustainability-report-2019.pdf>
2019 Annual Report. 2019. [ONLINE] Available through:
<https://www.boq.com.au/content/dam/boq/files/shareholder-centre/financial-results/
2019/annual-report-2019.pdf >
BOQ. 2020. [ONLINE] Available through :< https://www.boq.com.au/ >
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APPENDIX
Details of BOQ
Bank of Queensland
Description 2019 2018
Financial Data
Current assets 2218 1353
Non-current assets 53379 51627
Total assets 55597 52980
Current liabilities 972 636
Non-current liabilities 50766 48488
Total Liabilities 51738 49124
Equity 3859 3856
Total Revenue 1096 1121
Operating Expenses 587 587
Net Profit 298 336
Non Financial Data (Sustainability Measures)
Carbon emissions 18368 18459
Energy (electricity) usage 4082 4102
Waste 159 162
Number of directors 12 14
Number of female directors 3 3
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