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Simon Pugh & Peter Woods QLM Label Makers BOQ Business Banking customers

It’s personal

LYNNE POWER BOQ Owner-Manager KATIE KOCHANSKI Daisy Hill branch BOQ customer since age 7

Shareholder Review 2010

BOQ SHR 2010 FA - PRINT.indd 2 21/10/10 11:30 AM JoNAH & amber Community members

Shirley KOLPAK Shareholder It’s personal

BOQ SHR 2010 FA - PRINT.indd 3 21/10/10 11:30 AM Contents

1 Operational overview 3 Acquisitions 4 Financial highlights 7 Chairman’s report 11 managing Director’s report 15 Community 17 Customers 17 Environment 18 Employees 19 Executive team 21 Your Board 25 remuneration overview 26 Financial calender

BOQ SHR 2010 FA - PRINT.indd 4 21/10/10 11:30 AM Brand relaunch In February 2010, BOQ launched At BOQ, most of our branches are run by local a new brand promise: Owner-Managers. This means they’re running your own personal a small business, so they get what it means to The new brand was the culmination of deliver personal service. So we really can deliver an 18 month “inside out” brand review, on our promise of being your own personal bank. where both staff and customers helped The brand relaunch also represented the to really define what makes BOQ different perfect moment in time to reintroduce ourselves to the other . The overwhelming as BOQ, rather than the state-centric name of response was that for us, it’s personal. Bank of . Over the past decade, we have expanded right across . And it all started with this simple question. As BOQ, we hold onto our strong heritage, but Is there such a thing as a bank at the same time reflect our position as a more that is truly personal? progressive and formidable national brand. • A bank that knows your name • A bank that thinks you’re important • A bank that truly values personal relationships • A bank you can recommend • A bank that knows there is a much better way • Where every customer, big or small, will feel like they own the bank and Our Owner- not that the bank owns them Managers featured in our • For everyone at BOQ, greater brand relaunch pride and commitment advertising. This is Anthony Walker, • For our customers, BOQ would Owner-Manager of our Penrith be your own personal bank branch in NSW.

BOQ SHR 2010 FA - PRINT.indd 5 21/10/10 11:30 AM It’s personal 2

AWARDS FOR EXCELLENCE s BOQ won ‘Best Mobile Commerce Application’ in the Ambers, an online banking review to recognise excellence in transaction based online services. s Our Cash Management, Reverse Charges and Business Websavings Accounts have all won CANSTAR CANNEX awards in the past financial year. s BOQ won the ‘Best Value Savings in Australia’ award in 2009 from CANSTAR CANNEX.

NEW ONLINE SHARE TRADING s BOQ announced a partnership with CMC Markets Stockbroking, to provide an online share trading service, to be launched in 2011.

Mairead Hodgson, Owner-Manager, Innaloo, WA We are delivering on our strategy of reducing capital intensity and increasing margins through complementary acquisitions, and this year purchased St Andrew’s Insurance (Australia) Pty Ltd and St Andrew’s Life Insurance Pty Ltd as well as CIT Group (Australia) Limited and CIT Group () Limited.

s St Andrew’s Insurance s CIT Group (Australia) (Australia) Pty Ltd and St Limited and CIT Group Andrew’s Life Insurance Pty (New Zealand) Limited Ltd (St Andrew’s) are leading (CIT Australia and New manufacturers of insurance Zealand), now BOQ Finance products with a solid history (Aust) Limited, and BOQ of partnering with financial Finance (NZ) Limited institutions to offer these are one of the foremost products to their customers. providers of vendor based s Prior to the purchase, BOQ equipment finance and was already a significant leasing in Australia and customer of St Andrew’s New Zealand. It works with and importantly, our staff manufacturers, dealers and know how to successfully resellers to provide leasing and financing packages to George Kapelles, sell St Andrew’s products. consumers, businesses, Owner-Manager, s St Andrew’s is being government agencies and Werribee VIC operated as an education providers. independent entity, in much the same way as it s The CIT Australia and was profitably operating New Zealand business prior to our purchase. has been combined with BOQ’s existing s The St Andrew’s purchase equipment and debtor was immediately earnings finance businesses to form per share accretive. BOQ National Finance. s The CIT acquisition was also immediately earnings per share accretive. It’s personal 4 financial highlights

INCREASED NORMALISED CONTINUING TO CASH PROFIT REDUCE COSTS BOQ announced an increased Cost initiatives implemented normalised cash net profit throughout the 2009/10 after tax of $197.1 million for financial year have created a the year ended 31 August more efficient and productive 2010, an increase of 5% organisation, reflected in an from 2009. A strong balance improvement in costs relative sheet, continued expense to income. The Bank discipline, and high growth was pleased to report at in lending and deposits all its full year results 2010 contributed to securing such that the normalised cash a strong result in what has cost-to-income ratio had continued to be a challenging fallen 4.1% to 45.8%. economic environment. LENDING AND DIVIDEND DEPOSIT GROWTH A final ordinary dividend of BOQ once again out- 26 cents per share will be performed the Australian paid, taking the full year banking sector in terms of dividend to 52 cents per lending and deposit growth, share fully franked, matching recording approximately the dividend paid in 2009. 2.5 times more growth in loans and 1.5 times more growth in deposits than the industry average.

Jason Fraser, Owner-Manager, Buderim QLD financial highlights

STRONG CAPITAL AND LIQUIDITY s in February 2010, BOQ saw strong The Bank maintained an exceptionally strong investor demand for the Series 2010- level of capital, higher than required by APRA 1 REDS Trust RMBS which resulted and the Bank’s own internal benchmarks, in the transaction being upsized from which will enable the Bank to capitalise on $500 million to $850 million. growth opportunities that are expected to sGovernment guaranteed transactions progressively unfold going forward. This raising $1.25 billion in December high level of capital was supported by: 2009, $250 million in January 2010 sa record $1.6 billion Retail Mortgage and $1 billion in March 2010. Backed Securitisation (RMBS) issue s the 1-for-9 pro-rata non-renounceable completed in August 2010, which at the Entitlement Offer which was successfully time, was the largest issue of its kind completed in September 2009. The completed in Australia since 2007. retail component of this offer raised sa $150 million issue of Lower Tier 2 $110 million and followed the completion Convertible Notes in June 2010. of an institutional component and placement which raised $230 million.

$ millions 2010 2009 2008 2007 2006 (unless otherwise stated) $m $m $m $m $m FINANCIAL POSITION Total assets under management 38,784.4 34,545.8 30,912.5 21,653.3 16,866.7 Total loans under management 31,991.8 28,866.3 26,291.8 19,224.5 15,081.4 Total assets on balance sheet 38,570.9 34,012.0 29,883.2 20,037.3 15,797.1 Retail deposits 18,083.3 16,248.9 13,984.5 9,160.9 6,867.2 FINANCIAL PERFORMANCE Normalised cash net profit after tax 197.1 187.4 155.4 106.1 86.7 SHAREHOLDER PERFORMANCE Market capitalisation at balance date 2,120.3 2,327.7 2,377.4 2,101.0 1,628.4 Share price at balance date $9.83 $11.65 $15.86 $18.56 $15.29 Fully franked ordinary $0.52 $0.52 $0.73 $0.69 $0.57 dividend per share RATIOS Net interest margin 1.60% 1.56% 1.67% 1.81% 1.83% Capital adequacy ratio 11.7% 11.5% 11.0% 11.5% 12.5% Normalised cash cost-to-income ratio1, 2 45.8% 49.9% 56.1% 62.6% 64.5%

(1) Excluding significant and non-recurring items. (2) Non cash items relate to amortisation of identifiable assets. It’s personal 6

Lynne Power BOQ Owner-Manager Daisy Hill branch I consider myself a career banker, with 28 years’ banking and finance experience at a variety of financial institutions, including and St George. I established and managed the successful set of the largest community bank franchise (four branches) for Bendigo Bank from 2000 to 2004, but was still looking for an opportunity that would let me capitalise on my banking experience and run my own business. So in 2005 I bought the franchise of BOQ at Daisy Hill. As an Owner-Manager I love helping my customers find banking solutions that are right for them. My customers have my mobile number and know that I am here if they need me. This is the way banking should be. Over the past year the global economic recovery from the GFC has been mixed, with some countries, like Australia, seeming to recover easily, but there are many other countries still facing dire economic circumstances.

NORMALISED CASH NET PROFIT % AFTER TAX UP 5 $ millions 106.1 155.4 187.4 197.1

2007 2008 2009 2010 It’s personal 8

The European has extended to re-brand from the region-specific Bank emergency lending measures for banks of Queensland to the more national BOQ. and is keeping interests rates unchanged Pleasingly in the 2010 financial year, the Bank until 2011, in an effort to even out the grew loans 2.5 times higher and deposits 1.5 economic recovery of the 16 nations that times higher than that of our competitors. use the euro as their currency. Meanwhile, the US Government is trying to stimulate its The Bank recorded a normalised profit after economy, and tunnel out of its huge trade tax of $197.1 million for the full year 2010, a and budget deficits, by keeping interest rates 5% increase from 2009. A strong balance low, thus allowing the dollar to depreciate sheet, cost disciplines and the productivity and encouraging exports in the process. of our Owner-Managed branch model, assisted to achieve this strong result. Here in Australia, the share market has rallied, we are nearing full employment In an effort to conserve our capital strength, and the is going from the Bank announced a fully franked final strength to strength, so there are clear and dividend of 26 cents per share, taking obvious signs of economic improvement. the full year dividend to 52 cents per share, matching that paid in 2009. However, the impact of the GFC lives on in the banking environment - financial In keeping with our growth strategy to expand institutions are generally cautious on credit, in to higher margin and less capital intensive system growth has slowed since June / July businesses that complement our existing 2010, and house prices have stabilised. network, the Bank acquired a consumer and have protection insurance business and a vendor reported moderate, steady growth and finance business, both of which add to the while Queensland has been lagging behind long-term sustainability of the Bank and other states on some economic indicators, help us to remain a viable competitor. the Bank believes the outlook is becoming The Bank’s focus does remain towards retail much more positive, supported by growing mortgages and residentially secured SME business investment. The outlook in Western lending, resulting in a low risk profile. SMEs Australia is also upbeat with many major are however feeling the delayed effects of developments underway or planned that the macroeconomic slowdown and this is will drive growth in the local economy. reflected in bad debts, but we are confident BOQ has enjoyed strong growth in these states that these losses have peaked and an over the past year, reinforcing the Bank’s move improvement will be seen over the coming year. BOARD MATTERS becomes effective. An unsolicited offer As part of our process of continual was made to BOQ shareholders by Direct improvement, the Board has recently carried Share Purchasing in 2010, offering to out a full review of all corporate governance purchase BOQ shares for significantly less policies. There have also been a number of than their market value at that time. changes to the Board composition, with two If you do receive an unsolicited offer, directors retiring and a new director appointed. shareholders are urged to read the documents Mr Anthony Howarth, who joined us following carefully, check the current market value the acquisition of Home Building Society of their shares and obtain professional retired in July and Mr David Graham who financial advice before taking any action. has been a director for the past four years, OUTLOOK retired in October. I am joined by fellow The global outlook is improving, although it members of the Board in recognising both of is expected that growth in most advanced their contributions to the Bank and wishing economies will remain sluggish over the them all the very best for the future. coming year, while emerging economies will We were pleased to announce the appointment experience much higher levels of growth. of Mr David Willis as a non-executive It is probable that the Reserve Bank of Australia independent Director in February. Mr Willis will raise interest rates over the coming year. has over 32 years’ experience in financial services in the Pacific, the UK and the US. These higher interest rates and rising costs of Mr Willis’ extensive experience complements living will slightly dampen consumer spending the Board’s current skill set and he has been and housing market activity, but not to any providing vast assistance in strategically extent that it will deter an improvement in GDP. driving the Bank’s continued growth. Mr The Bank is aiming to increase our normalised Willis has also taken over as Chairman of cash net profit after tax for 2011 to between the Board Remuneration Committee. $220 million to $250 million. In striving to achieve this strong profit, the Bank will UNSOLICITED OFFERS TO continue to look after its staff, excel on BUY YOUR SHARES customer service, invest in the community Before I conclude, I must warn all shareholders and reward our shareholders. The Board about unsolicited offers to buy your shares. is committed to showing gratitude to our The is taking positive shareholders for their support by increasing steps to prevent ruthless companies and the 2011 full year dividend by 10% to 20%. individuals from offering to buy your shares. The On behalf of the Board, I thank all changes to the Corporations Amendment (No shareholders for their loyalty over the 1) Bill 2010 introduced to Federal Parliament past year and going forward. in June, will make it harder for individuals and businesses to make unsolicited offers. Shareholders of all Australian companies should be wary that there may be a spate NEIL SUMMERSON of unsolicited offers before the legislation Chairman It’s personal 10

Simon Pugh & Peter Woods QLM Label Makers qlm.com.au BOQ Business Banking customers Our company, QLM Label Makers is a proudly Australian owned business that has grown to become one of Australia’s leading label manufacturers. The road our business has taken to become a national brand has had its challenges, but plenty of rewards as well. In 2008 QLM expanded into Asia with a 50% stake in a company, followed soon after by the complete purchase of another Asian company in 2009. With these acquisitions we were able to combine the strengths of our manufacturing base in Australia with the innovations and potential of Asian markets. Over the years, BOQ has provided the support to make this expansion possible. Just as we aim to be a solutions partner with our clients, our BOQ Business Banker has worked with us to understand our business and to help us make better banking decisions, so we can keep making great labels. managing director’s report

I am pleased that the Bank was able to In March 2010, BOQ signed an agreement announce a record increase in normalised with to purchase St cash net profit after tax of $197.1m for the full Andrew’s Insurance (Australia) Pty Ltd and St year 2010, a 5% increase from 2009, despite Andrew’s Life Insurance Pty Ltd (collectively expected peak bad debt losses. A strong “St Andrew’s”) for $45 million, subject to post- balance sheet and focus on expense discipline, completion adjustments. St Andrew’s is a along with system-beating growth in lending leading Australian manufacturer of consumer and deposits, all contributed to securing such a credit insurance products with a solid history strong result. of partnering with financial institutions to deliver We have continued to deliver on our insurance solutions, including the Bank over commitments to the market in that we are a the past 6 years. The majority of St Andrew’s more efficient and productive organisation, premiums are in credit protection products, reflected in our normalised cost-to-income ratio addressing a significant customer need that has reducing by 4.1% to 45.8%. been growing in light of the GFC. We outperformed our competitors in both This acquisition fits within the BOQ growth lending and deposit growth (1.5x and 2.5x strategy, including income diversification system respectively) in the 2010 financial year, through businesses with complementary and have also increased our full year Net products to our core mortgage distribution. Interest Margin, despite funding costs putting pressure on margins. We are operating the St Andrew’s business as a stand-alone entity and we are targeting best in As per our guidance, we believe bad debt class cross selling with BOQ’s customer value losses peaked in the full year 2010, and proposition enhanced. investments in collection processes and resources are expected to improve specific In July 2010 we also completed the portfolio performance going forward. purchase of CIT Group (Australia) Limited and We have come through the GFC with a much CIT Group (New Zealand) Limited (CIT Australia higher capital level and stronger liquidity base. and New Zealand), paying a combined total for Our ratio at the end of FY10 of purchase consideration and refinance of debt of 8.7% remains well above APRA and internal $475 million. benchmarks. In August 2010, the Bank This vendor finance business works with completed the nation’s biggest sale of Retail manufacturers, dealers and resellers to provide Mortgage Backed Securitisation (RMBS) since leasing and financing packages to consumers, 2007*, providing room for further growth and businesses, government agencies and bolt-on acquisitions. education providers. DELIVERING ON OUR We have created a new division, BOQ GROWTH STRATEGY National Finance, which incorporates our As part of our growth strategy, this year we new vendor finance business, as well as our purchased an insurance business and a vendor existing equipment finance and debtor finance finance business to assist us in diversifying businesses. We see real synergies across these our income sources and reducing the capital businesses with further leverage opportunities intensity of our model. within our Owner-Managed Branch network. It’s personal 12 NORMALISED CASH COST-TO-INCOME % RATIO DOWN 4.1

62.6% 56.1% 49.9% 45.8%

2007 2008 2009 2010

OWNER-MANAGERSOWWNER-MANAGERS ENSUREENSURE PERSONAL SERVICE In terms of our core business, which includes our branch network, our business bankers and direct banking, the Owner-Managed Branch (OMB) model remains central to the Bank’s distribution strategy. We have had continuing success with the conversion of corporate branches to OMBs throughout the year, and this will continue. Our focus does however remain on sourcing only quality Owner-Managers and we intend to take the necessary time and care to ensure only the best bankers, and business people, become BOQ Owner-Managers. We have such great confidence in this business model and our Owner-Managers, that in early 2010 we launched a new brand campaign in which our Owner-Managers were featured. We wanted to highlight the personal service that our Owner-Managers provide and fittingly, ‘It’s personal’ was adopted as the guiding philosophy of all BOQ staff. Going forward, the Bank’s operating model will be based on three business lines – the core bank, BOQ National Finance, and St Andrew’s insurance. It is the start of our diversification into becoming a wider financial services group, giving us momentum to achieve our goal of becoming the real alternative in Australian financial services. EXECUTIVE TEAM ENHANCEMENTS We are aiming to continue to grow 1.5 to 2 Over the past year we have reorganised our Group times faster than our competitors and our Executive structure to help us to better realise the focus will remain on well secured housing and strategic opportunities available to the Bank. SME lending as we anticipate more growth opportunities in these areas in the near term. Our new Chief Financial Officer, Ewan Cameron is charged with ensuring we remain an efficient We will be looking to continue to convert organisation that delivers on our promises to the corporate branches to OMBs and open new market. The previous incumbent of this role, Ram OMBs in high growth areas over the next Kangatharan was appointed to a newly created couple of years. Further bolt-on acquisition position of Chief Operating Officer in March 2010 opportunities are also emerging. to oversee the day-to-day operations of the Bank, We will be growing and diversifying the including all three business lines. St Andrew’s business by improving sales Darryl Newton was appointed as the Bank’s productivity of existing corporate partners and we also intend to acquire new corporate Chief Risk Officer and he will drive the Bank’s partner relationships. With these changes we significant operational and credit risk initiatives are aspiring to double the size of this business and ensure continual enhancements to our risk line within three to four years. management function. We see significant growth in the vendor finance Keith Rodwell, previously the Managing Director of market and the CIT acquisition and creation of CIT Vendor Finance, Asia Pacific, was appointed BOQ National Finance provides an ideal growth to the position of Group Executive, BOQ National platform for BOQ. We are planning to create a Finance with responsibility for vendor finance, best in class finance company and to further equipment finance and debtor finance. develop our offering in the profitable motor Renato Mazza, the Chief Executive Officer of vehicle finance sector. St Andrew’s Australia also joined the Group We will be enhancing our product suite over the Executive team following the acquisition of coming year to help us attract new customers and St Andrew’s and continues to operate the lower our cost of funding. This will include a new St Andrew’s business. SME Business Privileges Package, a Self Managed Jim Stabback, who joined the Bank in 2008, Super Fund high interest bearing investment remains in the role of Group Executive, IT & account and a new . We Operations, overseeing the strategic focus of will also be offering a unique new ‘Save To Win’ the Bank’s IT platform and its service delivery, account which will enable deposit-holders with a along with the Bank’s important outsourcing minimum balance to be automatically entered into relationships with HP and Fiserv. a monthly cash prize draw. I am delighted to have this Executive team now In 2011 we will also be launching an online share in place and have every confidence that we have trading service in partnership with CMC Markets the necessary skills and experience to grow and Stockbroking, BOQ Trading, further enhancing enhance our Bank. customer and shareholder value. OUTLOOK Next year we anticipate that we will reach a profit of between $220 million to $250 Many of the issues the Bank faced in 2010 will million. We will also be looking to increase continue in to 2011, specifically the sustained dividends to ensure we remain a rewarding high funding costs the industry is bearing, and investment for our shareholders. the subsequent squeeze on margins. We also have a significant pipeline of regulatory changes and projects underway. Despite this, the Bank is optimistic about FY11 and has DAVID LIDDY issued the following guidance for investors. Managing Director & Chief Executive Officer It’s personal 14

Jonah & Amber Community members My beautiful little boy was born with vocal cord paralysis, a rare medical condition that blocked his airway and forced him to have a tracheostomy put in his throat so he could breathe. This meant that he could not cry, or giggle and needed me to clear his throat up to 40 times a day to keep him alive. I could not leave my baby for a second and the constant worry was overwhelming. I found a surgeon in who was willing to perform a laryngeal reconstructive surgery. If successful, this meant Jonah would not need the tracheostomy any more and he would be able to breathe normally through his mouth and nose and have a voice! This surgery involves using parts of Jonah’s ribs and grafting them to the vocal cords to create an airway. The operation would be life changing; the problem was we couldn’t afford the travel expenses involved. David Liddy heard of our plight and started a campaign at BOQ to get Jonah to Perth for his operation. The employees at BOQ were selling raffle tickets, holding morning teas and other fund raising all in aid of Jonah. They raised $23,000 which was enough for the several trips to Perth for our family, accommodation and other travel expenses. After recovering from the operation, Jonah started to cry and it was so overwhelming. It was the best gift I could have had. BANKING ON OUR KIDS AUSTRALIAN RED CROSS, This year’s Banking on our Kids fundraising CENTRE FOR YOUNG PEOPLE appeal raised a record $223,000 to help sick The Red Cross Centre for Young People kids get better, quicker. The funds raised were provides intensive, individualised support to at- given directly to Children’s Hospital Foundations risk youth to ensure they receive all the support Australia (CHFA) to be shared equally between they need to get back onto a positive life track its five hospital partners around Australia and and achieve their personal goals. The Centre’s will be used in the areas of greatest need in aim is to help reduce youth homelessness each hospital, specifically paediatric research and BOQ is delighted to be involved with initiatives leading to breakthrough treatments such an important and admirable goal. and cures for sick and injured kids, vital hospital FINANCIAL BASICS equipment and patient and family support FOUNDATION, ESSI MONEY services that otherwise would not exist. Financial literacy is now recognised as almost THE SMITH FAMILY, iTRACK as important as the other main cogs of MENTORING PROGRAM education – reading, writing and arithmetic. iTrack is an online mentoring program offered BOQ and the Financial Basics Foundation to senior high school students from low are helping teach our kids about managing socioeconomic status areas. By partnering their money through a new school based students with active members of the workforce competition called ESSI Money, an online game who can offer encouragement, advice and that gives high school students an opportunity the benefit of their experiences, iTrack helps to learn about Earning, Saving, Spending and prepare young adults for post-school life. Investing money in a fun and engaging way. DOLLAR-FOR-DOLLAR PROGRAM By matching BOQ employees’ fundraising activities dollar-for-dollar (up to $1,000 per activity), BOQ’s Dollar-for-Dollar program helps our people make a real difference in their local communities. In the past financial year, BOQ has matched $40,000 raised by our people and we believe this program is absolutely vital in supporting our people and the communities who support them.

David Liddy spent time with sick kids at the Royal Children’s Hospital . It’s personal 16

Jess is one of the young ambassadors who helped with this year’s Banking on our Kids appeal. customers

s BOQ has formed an alliance with Limited to allow BOQ customers to access rediATMs, one of the largest ATM networks in Australia, which provides our customers with greater convenience and accessibility to ATMs. Most importantly, our customers can also access the ATMs on this large network, as well as any BOQ branded ATMs, all free of direct charges. s We launched a foreign exchange payment facility during the year as an additional Internet Banking feature, making it even easier for customers to create and send international and domestic telegraphic transfers (also known as Real Time Gross Settlement), at their convenience online. s As part of a pipeline of new products to be launched in the next six months, BOQ announced an innovative, market-leading product, called the Save To Win Account. Customers will earn a small amount of interest on their savings, plus get the chance to enter into a monthly cash draw to win a major prize of at least $20,000 and lots of smaller prizes too.

s4HE"ANKUNDERWENTAN independent carbon impact assessment which captured energy and emissions data from business units, IT applications and assets. The results showed that the Bank has a low carbon environment footprint, which is well below regulatory reporting thresholds. It’s personal 18

DIVERSITY IN THE WORKFORCE In order to attract and retain a diverse workforce, the Bank is committed to providing an environment in which all employees are treated fairly and equitably. The Bank recognises that gender diversity is an important component to achieve this goal. Our current objectives and targets to ensure diversity include: 2010 GENDER BALANCE s increasing the representation SENIOR MANAGEMENT of women on our Board; s continuing to grow the number of women in senior roles; s encouraging the participation of women in leadership programs; 2010 GENDER BALANCE encouraging the participation of s WORKFORCE women in our Intern Program; s ensuring that gender is not a factor in remuneration; and s maintaining a workforce that reflects the diversity of the Australian population.

s4HE"ANKINCLUDESENVIRONMENTAL s6EGETABLE BASEDINKSANDRECYCLED considerations in our supplier paper are used in large printing jobs. evaluation and selection processes. s4HE"ANKWORKSWITHTRANSPORT sTONNESOFPAPERANDCARDBOARD and logistics service providers were recycled by BOQ this financial with a focus on reducing carbon year, saving approximately 1,723 trees. emissions from fleet operations. s4HE"ANKHASBEENRECYCLINGOBSOLETE mobile phone handsets, Blackberries and computer equipment. executive team

DAVID LIDDY RAM KANGATHARAN EWAN CAMERON Managing Director and Chief Operating Officer Chief Financial Officer Chief Executive Officer

David Liddy has over Ram Kangatharan Ewan Cameron was 40 years’ experience joined the Bank as appointed as the Bank’s in banking, including Chief Financial Officer Chief Financial Officer in international postings in October 2007 and May 2010. Ewan works in and Hong became Chief Operating with BOQ management Kong. He was appointed Officer in March 2010. and Board to ensure the Managing Director of He is responsible for Bank remains an efficient the Bank in April 2001. overseeing the day-to-day organisation that delivers He has a Masters in operations of the Bank on our promises to the Business Administration, and has accountability for market, while also fulfilling is Deputy Chairman of the retail branch network, the Bank’s strategic the Australian Bankers’ Business Banking, IT growth ambitions. Prior Association Council and Operations, Direct to joining BOQ, Ewan and Chairman of the Banking, Product, held numerous CFO roles Queensland Museum Marketing, Human both here and overseas Foundation. Resources, Legal, for a number of reputable He is also a member of BOQ Insurance and and forward thinking the Federal Treasurer’s BOQ Finance divisions organisations, where he Financial Sector of the Bank. Ram demonstrated strong Advisory Council is a senior finance financial management and the Queensland executive with global and successful leadership Government’s Smart corporate experience through M&A activities. State Council. Mr Liddy in a range of industries is a Senior Fellow of including banking, the consumer goods, IT, Institute of Australasia telecommunications and a Fellow of the and investments. He Australian Institute of was most recently Vice Company Directors. President Global Strategy and Redesign with EDS (Electronic Data Systems) in the USA. It’s personal 20

DARRYL NEWTON JIM STABBACK KEITH RODWELL RENATO MAZZA Chief Risk Officer Group Executive, Group Executive, Group Executive, IT and Operations BOQ National Finance Insurance and CEO St Andrew’s Darryl Newton was Jim Stabback joined Keith Rodwell holds Renato Mazza has 22 appointed Chief Risk BOQ in September 2008 the position of Group years’ experience in Officer in June 2010. as Group Executive, Executive, BOQ the Consumer Credit Darryl has extensive IT & Operations. In this National Finance and Insurance (CCI) sector experience in managing role, he oversees the has responsibility having held senior risk for financial services strategic focus of the for vendor finance, management positions in companies, having spent Bank’s IT platform and equipment finance Consolidated Insurance the six years prior to its service delivery, along and debtor finance. Group in London in joining BOQ in a variety of with the Bank’s important Keith has 20 years of the early 90s, the UK’s senior risk management outsourcing relationships lending experience in then number one niche roles at Westpac Bank. with HP and Fiserv. Australia and Asia for insurer in this sector. Previously, Darryl was a Jim has over 20 years’ both small and large He was part of a team partner at Ernst & Young experience managing ticket equipment leasing, of six who then formed where he consulted large scale operations, property and franchise St Andrew’s Group in on risk management technology and service finance. Prior to joining the UK in the mid 1990s BOQ he was Managing issues; he has extensive delivery management which then grew to Director CIT Vendor experience with banking in the financial services become one of the UK’s Finance, Asia Pacific, with clients including and telecommunications major underwriters of CCI responsibility for Australia, Commonwealth Bank industries. under New Zealand, China and of Australia, AMP and HBOS ownership. the rest of Asia. Prior to Bank, Bank of America Renato moved to Perth this, Keith held senior and ING Bank. in 2005 to help with roles with GE Capital and the development of St a US based alternative investment fund as well Andrew’s Australian as experience in the business, overseeing telecommunications, oil its integration into and insurance industries. CommInsure, CBA’s Keith has a Master insurance business, of Commerce from following their acquisition the University of New of St Andrew’s and South Wales and was in late a past Chairman of the 2008, and later Australian Equipment integration with BOQ. Lessors Association. NEIL SUMMERSON DAVID LIDDY STEVE CRANE B Com, FCA, FAICD, FAIM MBA, FAICD, SF Fin B Com, SF Fin, FAICD, FAIM Chairman – Age 62 Managing Director and Director - Age 58 Chief Executive Officer – Age 60 Neil Summerson is a Chartered David Liddy has over 40 years’ Steve Crane was appointed Accountant with 40 years’ experience in banking, including a Director of the Bank at the experience and is a past Chairman international postings in London Annual General Meeting on of the Queensland branch and . He was appointed 11 December 2008. He has 40 of the Institute of Chartered Managing Director of the Bank years’ experience in financial Accountants. He was formerly in April 2001. He has a Masters markets in Australia, including the Queensland Managing in Business Administration, is experience at both AMP and BZW Partner at Ernst & Young. He is Deputy Chairman of the Australian Australia, where he was promoted a Director of Natural Resources Bankers’ Association Council to Managing Director – Financial USA Corporation, Australian Made and Chairman of the Queensland Markets in 1995 and became Campaign Limited, Australian Museum Foundation. He is also a Chief Executive in 1996. In 1998, Property Growth Limited and member of the Federal Treasurer’s when ABN AMRO Australia Pty Property Funds Australia Limited. Financial Sector Advisory Council Limited acquired BZW Australia He is a former Chairman of the and the Queensland Government’s and New Zealand, Steve became Brisbane Water Board and is Smart State Council. Mr Liddy is Chief Executive and remained in currently Chairman of Motorama a Senior Fellow of the Financial this role until his retirement in June Holdings Pty Ltd, IDEC Pty Services Institute of Australasia 2003. Steve is now a member Ltd and Australian Property and a Fellow of the Australian of the Advisory Council of RBS Growth Fund. Mr Summerson Institute of Company Directors. Group (Australia) and a Director of has been a Director of the Bank Transfield Services, nib holdings since December 1996 and was limited, APA Ethane Limited, The appointed Chairman on 20 Sunnyfield Association, Taronga August 2008. Mr Summerson is Conservation Society Australia, Chair of the Bank’s Nomination and Chairman of Global Valve Committee and a member of Technology Limited. Mr Crane the Remuneration, Budget, is a member of the Bank’s Risk St Andrew’s Remuneration Committee and Corporate and Audit Committees. Governance Committee and Chair of the Budget Committee. It’s personal 22 your board

ROGER DAVIS DAVID GRAHAM ANTHONY HOWARTH, AO B Econ (Hons), Masters Philosophy B Com, B Econ (Hons), MBA, FCPA FAICD, SF Fin Director – Age 58 Former Director – Age 68 Former Deputy Chairman – Age 58

Roger Davis was appointed a David Graham has had extensive Tony Howarth was Chairman Director of the Bank on 20 August experience in the financial sector of Home Building Society Ltd 2008. He has 31 years’ experience specialising in capital markets which merged with the Bank in in banking and transactions. He was appointed December 2007. He has worked in Australia, the US and Japan. as a non-executive Director of the in the banking and finance He is currently a consulting Bank in October 2006. He has industry for over 31 years. Director at Rothschild Australia been a non-executive Director of His work has involved a number Limited. He was previously a a number of ASX listed companies of overseas appointments. Managing Director at Citigroup and he is currently a non- He has been the Managing Director where he worked for over 20 executive Director of Bandanna of Challenge Bank Limited and years and more recently was a Energy Limited. He is Chairman the CEO of Hartleys Limited. He Group Managing Director at ANZ of DDH Graham Limited, an was a former Chairman of Alinta Bank. He is a Director of Chartis, advisory and funds management Limited (retired 24 July 2006) and Macquarie Office Management company he founded in 1981. is currently Chairman of Mermaid Ltd, Management David retired as a Director of Marine Australia Limited and Non- Ltd and Ardent Leisure Ltd, the Bank on 8 October 2010. Executive Director of AWB Limited Ltd, Territory and Limited. He is also Insurance Office and Trust Ltd. CARMEL GRAY involved with a number of business B Bus He was formerly Chair of Pengana Director – Age 61 and community organisations Hedgefunds Ltd and Esanda, and being Chairman of St John of God a Director of ANZ (New Zealand) Carmel Gray was appointed a Health Care Group, President of Limited, CitiTrust in Japan and Director of the Bank on 6 April the Australian Chamber of Citicorp Securities Inc. in the USA. 2006. Ms Gray has had an Commerce and Industry and Chair He has a Bachelor of Economics extensive career in IT and Banking. of the Committee for Perth. (Hons) degree from the University Ms Gray was Group Executive In addition, he is a member of of , a Master of Philosophy Information Technology at Suncorp the Rio-Tinto WA Future Fund, degree from Oxford and is a from 1999 to 2004. Prior to her and is on the University of Western Rhodes Scholar. Mr Davis is Suncorp appointment she was Australia’s Senate. Tony retired as a a member of the Risk Committee General Manager of Energy Director of BOQ on 26 August 2010. and the Nomination Committee. Information Solutions Pty Ltd and Managing Director of Logica Pty Ltd. Ms Gray is a member of the Bank’s Risk Committee and the Chair of the Audit Committee. your board

BILL KELTY, AC JOHN REYNOLDS DAVID WILLIS B Econ B Sc (Hons), Dip Ed, FAICD, FAIM B Com , ACA, ICA Director – Age: 62 Director – Age: 67 Director – Age: 54

Bill Kelty has over 32 years’ John Reynolds was appointed a David Willis has over 32 years’ experience in industrial relations. Director of the Bank in April 2003. experience in financial services in He was appointed a Director of He has had extensive CEO-level the Asia Pacific, the UK and the the Bank in August 2001 and is experience at top 100 media and US. He is a qualified Accountant currently a Director of the Linfox resource companies in Australia in Australia and New Zealand and Group and a Commissioner of the and overseas. He was formerly has had some 17 years’ experience Australian Football League. He is Chairman of Arrow Energy Limited. working with Australian and also involved in the Foundation He is a Director of Mater Health foreign banks. He has held senior for Rural and Regional Taskforce Services Brisbane Limited and executive roles at Westpac, HBOS and was previously Chairman an advisor to various private Australia, Australia of the Federal Government’s companies and professional and Southpac Corporation; Regional Development Taskforce. organisations. Mr Reynolds is a corporate advisory business Mr Kelty was Secretary of the Chairman of the Bank’s Risk owned by The of Australian Council of Trade Committee and a member of the New Zealand and Lloyds Bank. Unions from 1983 to 2000 and Audit Committee, Remuneration David is a Director of New Zealand a member of the Reserve Bank Committee and Nomination Post and Kiwi Bank together Board from 1988 to 1996. He is Committee. He is Chair of the with CBH (A Grain Cooperative Chair of the Bank’s Corporate St Andrew’s Remuneration in Western Australia). He was Governance Committee and a Committee. appointed a Director of the Bank member of the Audit Committee. in February 2010. He is Chair of the Remuneration Committee, a member of the Corporate Governance Committee and a member of the St Andrew’s Remuneration Committee. It’s personal 24

Shirley Kolpak BOQ Shareholder I have been a shareholder for a very long time. I thought bank stocks paid good dividends and that BOQ’s growth profile looked good, so I purchased a relatively small amount of BOQ shares. I was a bit worried throughout the GFC, but BOQ’s share price held up remarkably well and I still received my dividends. My daughter recently acquired some BOQ shares also. I like to know that she is thinking about her financial security now. I don’t want her to have to worry about money when she gets to my age. shareholder information

remuneration overview

Short-term Post- Other Termination Share- Total employment long-term benefits based payments $$$$$$ NON-EXECUTIVE DIRECTORS Neil Summerson 267,500 14,584 - - - 282,084 Steve Crane 130,583 11,753 - - - 142,336 Roger Davis 133,333 12,000 - - - 145,333 Carmel Gray 161,500 14,106 - - - 175,606 Bill Kelty 130,292 11,726 - - - 142,018 John Reynolds 173,833 14,584 - - - 188,417 David Willis 1 62,0835,588---67,671 FORMER DIRECTORS Peter Fox 2 25,310 2,278 - 46,748 - 74,336 Anthony Howarth 3 123,35211,102---134,454 David Graham 4 129,333 11,640 - - - 140,973 EXECUTIVE DIRECTORS David Liddy 2,202,645 50,141 70,849 - 1,096,791 3,420,426 EXECUTIVES Ram Kangatharan 1,359,149 25,047 3,938 - 567,021 1,955,155 Ewan Cameron 5 72,4422,27195--74,808 Jim Stabback 635,268 38,104 955 - 178,179 852,506 Darryl Newton 6 61,235 2,271 81 - - 63,587 Keith Rodwell 7 221,667 6,450 - - - 228,117 Renato Mazza 8 108,300 1,267 1,062 - - 110,629 Brad Edwards 505,464 24,655 4,998 - 123,682 658,799 FORMER EXECUTIVES Daniel Musson 9 210,820 12,935 - 490,672 209,251 923,678 Bruce Auty 10 102,630 12,197 - 377,671 115,041 607,539 David Marshall 11 393,810 38,948 - 170,524 3,460 606,742

1 Commenced 22 Febuary 2010 2 Resigned 25 November 2009 3 Resigned 26 July 2010 4 Resigned 8 October 2010 5 Commenced 5 July 2010 6 Commenced 5 July 2010 7 Commenced 30 June 2010 8 Commenced 1 July 2010 9 Resigned 19 March 2010 10 Resigned 18 December 2009 11 Resigned 13 August 2010 Share Registry financial calendar Link Market Services Limited Level 15 2010 324 Queen Street Ordinary shares (BOQ)* Brisbane Qld 4000 Australia: 1800 779 639 Ex-dividend date 12 November 2010 International: +61 2 8280 7626 Record date 18 November 2010 Facsimile: +61 2 9287 0303 Email: [email protected] Final dividend payment date 2 December 2010 Website: linkmarketservices.com.au Annual General Meeting 9 December 2010 Company details 2011 Limited Level 17, BOQ Centre Ordinary shares (BOQ)* 259 Queen Street Interim results and interim 14 April 2011 Brisbane Qld 4000 dividend announcement Telephone: +61 7 3212 3333 Ex-dividend date 3 May 2011 Facsimile: +61 7 3212 3399 Website: boq.com.au Record date 9 May 2011 Investor Relations: +61 7 3212 3463 Interim dividend payment date 25 May 2011 Final results and final 13 October 2011 Customer Service dividend announcement 1300 55 72 72 (within Australia) Ex-dividend date 9 November 2011 +61 7 3336 2420 (overseas) Record date 15 November 2011 ABN 32 009 656 740 ACN 009 656 740 Final dividend payment date 1 December 2011 Annual General Meeting 8 December 2011 E-Communications Register now to receive annual reports, PEPS (BOQPC)* dividend advices and other company information from BOQ by email. By registering Announcement date 17 March 2011 for this free service, you can receive significant Ex-dividend date 22 March 2011 company announcements as they happen. Record date 28 March 2011 Furthermore, by reducing printing, there are significant cost savings for the Bank and you Payment date 15 April 2011 are helping to save the Australian environment. Announcement date 15 September 2011 Ex-dividend date 20 September 2011 Annual General Meeting The 2010 Annual General Meeting Record date 26 September 2011 will be held at the Sofitel Hotel, Payment date 17 October 2011 249 Turbot Street, Brisbane * Dates are subject to change. on Thursday, 9 December 2010 (registration commences at 9.15am).

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