Following the first half result, Credit Suisse downgrades earnings by -3-8%, envisaging the bank will struggle to offset increased costs. The broker’s dividend profile is also lower, reflecting a more sustainable payout ratio.
Credit Suisse does not believe the bank has the scale for the required investment in technology or to cope with increasing regulatory requirements. Credit Suisse retains a Neutral rating and reduces the target to $9.25 from $9.69.
Target price is $9.25.Current Price is $8.84. Difference: $0.41 – (brackets indicate current price is over target). If BOQ meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges – negative figures indicate an expected loss).