ASIC has commenced proceedings against the Bank of Queensland relating to potentially unfair contract terms for certain small business lending from November 2016 to June 2019.
The bank believes the potential compensation will be limited and not material. Still, Morgan Stanley points out there is some uncertainty regarding compensation costs and volume growth in commercial lending.
This type of legal action does not usually carry fines but has the prospect of customer compensation.
Underweight rating. Industry view is In-Line. Price target is $8.40.
Target price is $8.40.Current Price is $8.99. Difference: ($0.59) – (brackets indicate current price is over target). If BOQ meets the Morgan Stanley target it will return approximately -7% (excluding dividends, fees and charges – negative figures indicate an expected loss).