Goldman Sachs forecastsCash earnings: FY20E cash earnings down...

Goldman Sachs forecasts

Cash earnings: FY20E cash earnings down -34% on pcp to A$210 mn vs. Bloomberg consensus of A$204 mn.

DPS: deferred interim DPS of A10¢ and final DPS of A2¢.

What we expectn Upside risk to NIMs: BOQ should be relatively well positioned for the current NIM environment, which has been characterised by falling basis risk, expanding housing lending spreads and lower term deposit costs through the back-end of the half. We forecast BOQ’s NIM to be flat hoh in 2H20E and then down -3 bp in FY21E (on pcp).n

Signs of housing loan momentum improving through back-end of half: BOQ grew mortgage below system through the half but momentum progressively improved back towards system levels in August (here). We would be interested in management commentary around the lending outlook and sustainability of momemtum from August.n

BDD’s pre-announced but leaves BOQ well-placed to deal with pandemic: While BOQ’s pre-announced BDD charge was above our previous expectations (here), we think this now leaves them relatively well positioned to deal with the fallout from the Covid-19 pandemic, particularly when coupled with their capital position, with the CET1 ratio expected to be >10% at 31-Aug-20.