Growth. Evolution. Achievement. The Bank’s goal throughout 2008/09 has been to emerge from the economic crisis a stronger, leaner, more competitive bank. A bank that continues to grow, evolve and achieve.

Contents Operational highlights 2 Executive team 16 Financial highlights 4 Your Board 18 Chairman’s report 6 Remuneration overview 21 Managing Director’s report 10 Outlook 23 Corporate Social Responsibility 15 Financial calendar 24

Front cover: Chris Nilon, General Manager of IT, climbed three of the highest peaks in Antarctica on his annual leave in December 2008, including Mt Vinson where this photo was taken. Project Pathways completed Project Pathways, launched in December 2008, was the formal process to further enhance the Bank’s strength through efficiency initiatives, portfolio optimisation and strategic partnerships.

The project, which had the main aim of Portfolio optimisation maximising shareholder value, was successfully > Completed enhancements to direct channels completed in August 2009. and the OMB network to incentivise stronger Efficiency program growth in retail deposits. > Estimated annual cost savings of > Focused on increasing our share of the SME approximately $50m. market, via enhanced product offerings and cross-sell capability. > Executed initiatives that allowed the Bank to become competitive with major banks on a Strategic partner cost-to-income ratio basis. > BOQ received interest from a number > Organisation restructure resulted in a single of parties, with capital raising providing management structure and shared services competitive pricing for potential shareholders. function to better service the Bank’s unique > BOQ will remain an independent and Owner-Managed Branch™ (OMB) network. credible alternative to the major banks.

1 Our focus remains on building shareholder value, and in the current economic environment it is imperative we continue to think outside the square to do this.

2 Strong growth Awards for excellence Improved capital position Even throughout the > BOQ continued to > Bank of Queensland won the > The retail entitlement global financial crisis, outperform competitors in ‘Best Value Savings Accounts shareholder offer raised the Bank’s unique OMB loan growth, with 88% of in Australia’ award from $111m in September 2009. network continued to this growth funded through CANSTAR CANNEX. demonstrate unmatched > The institutional offer and retail deposits. > Managing Director David placement raised $230m in productivity. Liddy was named Australia’s August 2009. Financial Services Executive of We have now converted > Raised $108m in January the Year by Australian Banking 39 corporate branches 2009 through institutional & Finance Magazine. to high-yielding OMBs, placement and share > BOQ’s online banking purchase plan. where we have seen services were recently highly average monthly rated 5 out of 6 stars by PC settlements increase Authority magazine. 64% after conversion. > TNS Business Finance Monitor Survey ranked BOQ number 1 in business customer satisfaction. 10% 16% Lending growth Retail deposit growth

3 > Despite adverse > Continued focus on market conditions and well-secured housing reduced net interest and SME lending, margins, continued maintained sound growth in lending and asset quality. Bad deposits combined debts have been with rigorous cost increasing, but are still surveillance helped tracking well below drive normalised major bank peers. 64.5% cash net profit after > In response to tax 21% higher prevailing market 62.6% to $187.4m. conditions, BOQ > Controlled approach adopted a prudent to expense dividend policy, 56.1% management, along declaring a full- with efficiencies year dividend of identified by Project 52 cents fully franked Pathways, resulted per share. 49.9% in normalised cash cost-to-income ratio dropping 6.2% to 49.9%.

2006 2007 2008 2009

Normalised cash cost-to-income ratio

4 Financial summary $ millions (unless otherwise stated) 2009 2008 2007 2006 2005 $m $m $m $m $m

Financial position:

Total assets under management 34,545.8 30,912.5 21,653.3 16,866.7 14,388.6

Total loans under management 28,866.3 26,291.8 19,224.5 15,081.4 12,381.5

Total assets on balance sheet 34,012.0 29,883.2 20,037.3 15,797.1 13,650.6

Retail deposits 16,248.9 13,984.5 9,160.9 6,867.2 5,843.3

Financial performance:

Normalised cash net profit after tax 187.4 155.4 106.1 86.7 75.6

Shareholder performance:

Market capitalisation at balance date 2,327.7 2,377.4 2,101.0 1,628.4 1,177.8

Share price at balance date $11.65 $15.86 $18.56 $15.29 $11.65

Fully franked ordinary dividend per share $0.52 $0.73 $0.69 $0.57 $0.48

Ratios:

Net interest margin 1.56% 1.67% 1.81% 1.83% 1.83%

Capital adequacy ratio 11.5% 11.0% 11.5% 12.5% 12.4%

Normalised cash cost-to-income ratio1,2 49.9% 56.1% 62.6% 64.5% 65.8%

(1) Excluding significant and non-recurring items.

(2) Non cash items relate to amortisation of identifiable assets.

5 FY 2009 funding mix

Short-term Wholesale 17%

Retail 48%

Long-term Wholesale 11%

Securitisation 18%

Capital 6%

187.4

155.4 73 69 57 52 106.1

86.7

4.6% 4.5% 3.7% 3.7%

20062007 2008 2009 2006 2007 2008 2009

Normalised cash Dividends net profit after tax Cents per share $ million Dividend yield 6 t is no exaggeration to say that financial year were much lower channel, that will better drive During the year under the past 18 months has been an than our competitors, reflecting targeted growth in the retail and review we not only unprecedented time, not only our continued focus on well- SME segments. I increased profitability for the Australian financial services secured housing and SME lending. but also, through the In early 2009 the Bank industry, but for the global The deteriorating economy successful completion commenced the search for a economy. Fortunately, the unique forced many Australian companies of Project Pathways, strategic partner and received strength of our domestic banking to fail in the 2009 financial year created a platform that significant interest from European system and the stimulus of which in turn forced bad debts will strategically drive and Asian investors. The expansionary fiscal and monetary upwards for banks. Fortunately our continued growth improved market conditions policy have to a large degree Bank of Queensland’s position is into the future. in August 2009 allowed for a insulated Australia from the worst much better than the major banks successful capital raising where of the global recession. due to our lower risk profile and Project Pathways was the the potential strategic partners Notwithstanding, an inescapable our traditionally low levels of formal process announced at competed for BOQ stock. consequence of the global corporate exposure. our 2008 AGM designed to The Bank received tremendous financial crisis for Australian banks Against this backdrop of challenges, further strengthen the Bank’s support from shareholders has been the severe contraction the Bank’s ability to increase foundations and forward growth for the 1-for-9 pro-rata non- of traditional wholesale funding normalised cash net profit after prospects through efficiency renounceable Entitlement Offer channels. Despite intensified tax by 21% to $187.4 million is an initiatives, portfolio optimisation, which was successfully completed demand within the marketplace outstanding achievement. strategic partnerships and in September 2009. The retail for alternate funding, over complementary mergers. component raised $111 million the past 12 months Bank of Consistent with the prudent approach by the wider banking Within six months this and followed the completion Queensland has consolidated of an institutional component one of the strongest capital market, directors remained comprehensive diagnostic conscious of the over-riding need review of our entire organisation and placement which raised positions of Australian banks and approximately $230 million. sourced additional liquidity. to preserve capital given prevailing had identified $50 million market conditions and declared a in annualised cost saving Our institutional shareholders Another undoubted impact on reduced final dividend of 26 cents opportunities. Among the key subscribed for approximately the Australian financial system has per share fully franked. This lifted restructuring outcomes achieved 93% of their entitlements. been the significant increase in the full-year dividend to 52 cents through Project Pathways was This exceptional show of support impaired assets for many banks. per share fully franked. the merging of our Retail and by our institutional shareholders Notably, Bank of Queensland’s Business Financial Services is an endorsement of the Bank’s impaired assets in the 2009 channels into a single Banking business model and strategic growth blueprint. 7 Growth

“ We are a strong competitor ...... focused on continuing to grow our business further and faster than the others.”

Following the successful completion of our $340m equity raising, the Bank’s Tier 1 capital position is now one of the strongest of Australian banks. This new capital will allow BOQ to take advantage of emerging growth opportunities and to support BOQ’s unique Owner-Managed Branch™ network in pursuing its natural growth potential.

8 Furthermore, in a clear Our Managing Director David The RBA’s synopsis indicates that reinforcement of our credit Liddy must also be congratulated there should be more conducive standing in the debt markets, the on his appointment as Deputy trading conditions for the Bank in Bank’s Government guaranteed Chair of the Australian Bankers’ 2010 than the past 12 months and bond issue launched in early July Association (ABA). Given the key we believe this, combined with the was three times oversubscribed role played by the ABA in the sustainable lower cost base now in and raised $750 million. regulation of a stable Australian place as a result of the successfully As a result of these various equity banking system, his appointment to completed Project Pathways, can and debt raising initiatives, the this influential position reflects Mr be leveraged to grow shareholder Bank has exceptionally strong Liddy’s standing and respect within wealth in the year ahead. capital and liquidity positions which the domestic banking sector. will enable us to fully capitalise On behalf of the Board, I thank all on growth opportunities we shareholders for their loyalty and expect to progressively unfold support over the past year and throughout the current financial going forward. Neil Summerson year and beyond. At the start of the new financial Chairman I must thank your Board for year there were emerging signs the valued strategic input and of a more buoyant Australian sage advice collectively made economic outlook, with both to the Bank’s successful result. household spending and business In addition to guiding the Bank investment gaining traction. In through this challenging time, early September the Reserve your Board has also undertaken a Bank of Australia noted that comprehensive review to improve domestic economic conditions the Bank’s Corporate Governance had not only been stronger than policies to ensure continued best expected, but that sentiment in practice in governing our bank. global financial markets had also continued to improve.

9 16.2 14.0

9.2

6.9

2006 2007 2008 2009

etail deposits $ billion

FY 2009 g g i n n i n QLD 64%

NSW 12%

VIC 11%

WA 10%

Other 3%

10 Bank of Queensland emerged able to quickly and efficiently million, reinforcing that we are downturn and to lay a foundation at the end of the 2009 financial realign the Bank’s operational essentially a domestic retail bank for our forward growth. year a leaner, more robust focus to driving deposit growth. focused on low risk housing and As part of the efficiency stream of bank with a platform ready to With Owner-Managers directly small commercial lending. Pathways, a cross sectional team strategically drive our continued incentivised, the Bank’s retail In Australia we have seen many of BOQ senior staff examined growth forward. deposits increased 16% from the companies struggling in the every aspect of our expenditure The Bank has continued to grow previous record year. past year, increasing bad debts in order to effectively target despite the challenging economic Also contributing to the strong for banks. Bank of Queensland $50 million in annualised cost environment and has again retail deposit growth achieved has faced a moderate increase savings opportunities. One of recorded a strong profit. Stringent was an enhanced product in bad debts as was expected the main initiatives of the team asset quality surveillance and offering. In 2009 CANSTAR with the downturn in the and the Portfolio Optimisation targeted cost savings combined to CANNEX rated Bank of economy, but this is well below Program was to streamline underpin the Bank’s normalised Queensland as providing the those incumbent on the major costs and synergies of the Retail cash net profit after tax of $187.4 best value nationally for savings Australian banks. and Business Financial Services million, a 21% increase over the accounts - with our Online Despite the challenging economic channels. As a result, these prior year. Savings, Cash Management and environment the Bank started the channels were merged into a Not only did we achieve our Term Deposit products all rated new financial year more strongly single Banking division. earnings forecasts, but also again as offering outstanding value placed than ever to capitalise One of the most positive outpaced the vast majority of for customers. on future growth opportunities, outcomes of the efficiency our competitors in loan growth. In the second half of the year we largely due to Project Pathways. stream of Pathways is the Bank’s Increasing retail deposits was focused on margin improvement Project Pathways represents one reduction in the cost-to-income particularly important during in our deposit book, which of the most significant strategic ratio. The cost disciplines we have the first half of the year under stifled further growth somewhat initiatives undertaken by the Bank put in place combined with our review as higher costs of funding but overall put us in a relatively for many years. Comprising three expanding revenue base have led to banks vying for alternative strong position. core streams - efficiency, portfolio seen our normalised cash cost-to- funding sources. The Bank’s positive result is also optimisation and strategic income ratio decrease to 49.9% As a result aggressive sector-wide due to our highly disciplined partnerships, Pathways was in FY 2009, a 6.2% decrease from competition for deposits intensified focus on maintaining strong asset implemented to take advantage the previous year. This is a long during the year. At BOQ, the quality. As at 31 August 2009, of opportunities arising out of way from the 76% cash cost-to- productivity and flexibility of unlike our competitors with large the financial crisis, to counter the income ratio the Bank had back in our unique Owner-Managed exposures, Bank of Queensland negative effects of the economic 2001, the year I joined BOQ. Branch model ensured we were had only 67 exposures over $10 11 Evolution

“ BOQ has emerged from the recent changes to the financial services landscape well placed to become the credible alternative to the major banks in Australia.” – David Liddy

12 By September 2009 we had internal initiatives for our existing The Bank has continued it’s We intend to harness this successfully completed Project shareholders, our long term corporate social responsibility opportunity so that we can Pathways with the efficiency ambitions as an independent strategy which is the process that continue to be a rewarding program executed, the portfolio bank, and the improving equity ensures all stakeholders of the investment for shareholders. optimisation strategy underway markets, we decided to pursue Bank – including shareholders, and we had completed an the capital raising rather than customers, employees, the additional equity raising to choose a strategic partner. environment and community further bolster our already In other initiatives designed to – all collectively benefit as the strong balance sheet. optimise the performance of Bank grows. David Liddy The retail and institutional our sector leading distribution As part of our commitment to Managing Director and equity raisings completed in channel, we have now converted shareholders we are focused on Chief Executive Officer September 2009 were heavily 39 corporate branches to maximising shareholder value. To subscribed, raising $340 million higher-yielding Owner- do this we will continue to focus and contributing to the highest Managed Branches and the on optimising the Bank’s portfolio capital position held in the 135 under-performing New South through enhancing our direct year history of the Bank. Our Wales branches have now channels, using the power of our high capital ratio of 12.2% (Tier been consolidated to improve OMB network to grow deposits One 9.6%) at the writing of this the overall performance of and increasing revenue from the report, is one of the strongest the region. SME market through cross selling of all Australian banks, and Interstate expansion of our and enhanced product offerings. well in excess of both APRA Owner-Managed Branches will With the Australian public requirements and our own continue and this expansion, continuing to widely demand internal benchmarks. combined with our acquisition a credible, customer-centric We did look at possible merger of Western Australia’s Home alternative to the major banks, and acquisition activity as part Building Society in December our unique OMB channel and the of the strategic partnership 2007, is diminishing BOQ’s unprecedented strength of our arm of Project Pathways traditional geographic financial position clearly present and received interest from a concentration in Queensland. a major opportunity for us in number of parties looking to This reduces the Bank’s the immediate future to bridge gain a strategic relationship with geographic risk and provides a the void in the banking market the Bank. However, in the nationwide base to further grow following the takeovers of St context of preserving the value our brand. George and Bank West. creation from the Pathways 13 14 Corporate Social Responsibility

Community > Shareholders donated over Environment > The Bank works with transport $30,000 to children’s hospitals and logistic service providers > The Bank’s annual Banking around Australia via the > 92.4 tonnes of paper and with a focus on reducing on our Kids appeal raised Investing in Hope program. cardboard were recycled carbon emissions from its fleet more than $180,000 for by Bank of Queensland operations via hybrid vehicles. Children’s Hospital Foundations this financial year, saving Australia (CHFA) to be used Customers approximately 1,202 trees. > The Bank is partnering with a plastic card manufacturer to support initiatives leading > The Bank has been monitoring > The Bank more than halved with the capability of offering to breakthrough treatments and improving service by its carbon footprint originating cards made from up to 88% and cures for sick and conducting regular mystery from travel-related activities recycled plastic. injured children. shopping exercises across our estimated to be equal to > BOQ donated $100,000 to branch network. the annual greenhouse gas Employees the victims of the Victorian > We are discussing with emissions from around 16 bushfires and $50,000 to the customers what they want average Australian households. > The Bank has revitalised it’s Queensland Premier’s Disaster and using this information > The Bank recycles induction process to ensure Relief Appeal to help those to design a set of service obsolete mobile phone employees are properly impacted by floods. standards to ensure consistent handsets, Blackberries and welcomed and quickly > The Bank matched over delivery of a quality customer computer equipment. become accustomed to the service experience. BOQ culture. $40,000 raised by employees > The Bank is using vegetable- through its Dollar-for- based inks and recycled paper Dollar program. in large printing jobs.

15 David Liddy Ram Kangatharan David Marshall Managing Director & Group Executive & Group Executive Chief Executive Officer Chief Financial Officer Banking

In April 2001, David was appointed as Ram Kangatharan was appointed in David Marshall was appointed Group Managing Director & Chief Executive October 2007. He is responsible for Executive Banking in April 2009. He Officer. Since his appointment, the Bank Finance, Treasury and Management is responsible for the Bank’s franchise has recorded a succession of record Information Systems. He is a senior banking, corporate branch banking, half-year and full-year profits which finance executive with global corporate Private Banking, as well as Business have occurred through a complete experience in a range of industries Banking, Equipment Finance, Property transformation of the Bank, with the including banking, telecommunications Finance, Debtor Finance and Trade opening of new branches, through a and investments. He was most recently Finance. David joined the Bank as Group unique Owner-Managed Branch Model with EDS (Electronic Data Systems) in Executive Business Financial Services in and a return to more traditional, face- the USA. September 2007. He has had 23 years’ to-face, people-focused business and banking experience including senior commercial banking services. national roles in business and retail banking and risk management with CBA and Westpac.

16 Bruce Auty Daniel Musson Jim Stabback Group Executive Group Executive Group Executive Group Risk People & Corporate Services IT & Operations

Bruce Auty joined Bank of Queensland Daniel Musson was appointed in October Jim Stabback joined Bank of Queensland in 2004 and was appointed Group 2007 to oversee the Bank’s Brand in September 2008 as Group Executive, Executive Group Risk in September 2007. Management, Product Management, IT & Operations. In this role, he oversees His responsibilities include Credit Risk Human Resources, Customer Relations, the strategic focus of the Bank’s IT platform Assessment, Credit Risk Review, Credit Investor Relations and Corporate Affairs and its service delivery, along with the Policy, Portfolio Performance, Internal functions. He has broad experience in Bank’s important outsourcing relationships Audit, Operational Risk, Compliance and senior marketing, brand, product and with EDS and Fiserv. Jim has over 20 Fraud. Bruce has 40 years’ experience in customer management roles across the years’ experience managing large scale corporate, investment, commercial and banking, insurance and retail sectors. He operations, technology and service delivery retail banking in the USA, Australia and was most recently Head of Product and management in the financial services and New Zealand. Underwriting Personal Insurance with the telecommunications industries. Insurance Australia Group (IAG).

17 Neil Summerson Anthony Howarth, AO David Liddy

B Com, FCA, FAICD, FAIM FAICD, SF Fin MBA, FAICD, SF Fin Chairman, Non-Executive Independent Deputy Chairman, Non-Executive Managing Director & Chief Executive Director – Age: 61 Independent Director – Age: 57 Officer, Executive Non-Independent Director – Age: 59 Neil Summerson is a Chartered Accountant Tony Howarth was Chairman of Home with 39 years’ experience and is a past Building Society Ltd which merged with David Liddy has over 40 years’ experience Chairman of the Queensland branch of the Bank in December 2007. He has in banking, including international postings the Institute of Chartered Accountants. He worked in the banking and finance industry in London and Hong Kong. He was was formerly the Queensland Managing for over 31 years. His work has involved appointed Managing Director of the Partner at Ernst & Young. He is a Director a number of overseas appointments. Bank in April 2001. He has a Masters in of AmerAlia Inc, Australian Made Campaign He has been the Managing Director of Business Administration. He is Deputy Limited, Australian Property Growth Challenge Bank Limited and the CEO Chairman of the Australian Bankers’ Limited and Moore Stephens (Queensland) of Hartleys Limited. He was a former Association Council, Chairman of the Limited. He is a former Chairman of the Chairman of Alinta Limited (retired 24 Queensland Museum Foundation and Brisbane Water Board and is currently July 2006) and is currently Chairman of a Board member of the Brisbane Lions Chairman of Motorama Holdings Pty Ltd, Mermaid Marine Australia Limited and Australian Football Club. He is also a IDEC Pty Ltd and Australian Property Non-Executive Director of AWB Limited member of the Federal Treasurer’s Growth Fund. Mr Summerson has been and Wesfarmers Limited. He is also Financial Sector Advisory Council and the a Director of the Bank since December involved with a number of business and Queensland Government’s Smart State 1996 and was appointed Chairman on 20 community organisations being Chairman Council. Mr Liddy is a Senior Fellow of the August 2008. Mr Summerson is Chair of of St John of God Health Care Group, Financial Services Institute of Australasia the Bank’s Remuneration and Nomination President of the Australian Chamber of and a Fellow of the Australian Institute of Committee and a member of the Commerce and Industry and Chair of the Company Directors. Audit Committee. Committee for Perth. In addition, he is a member of the Rio-Tinto WA Future Fund, and is on the University of Western Australia’s Senate. Tony was appointed Deputy Chair of the Bank in August 2008 and is a member of the Remuneration and Nomination Committee, Risk Committee and Corporate Governance Committee.

18 Steve Crane Roger Davis Peter Fox David Graham

B Com, SF Fin, MAICD, FAIM B.Econ (Hons), Masters Philosophy B Bus (Hons) B Com, B.Econ (Hons), MBA, FCPA Non-Executive Independent Non-Executive Independent Non-Executive Non-Independent Non-Executive Non-Independent Director – Age: 57 Director – Age: 57 Director – Age: 48 Director – Age: 67

Steve Crane was appointed a Director Roger Davis was appointed a Director Peter Fox has been with the Linfox David Graham has had extensive of the Bank at the Annual General of the Bank on 20 August 2008. He has Group for over 22 years. After a diverse experience in the financial sector Meeting on 11 December 2008. He has almost 31 years’ experience in banking career within the organisation, he was specialising in capital markets transactions. almost 40 years’ experience in financial and investment banking in Australia, appointed, in chronological order, He was appointed as a non-executive markets in Australia, including experience the US and Japan. He is currently a National Fleet Manager, Executive Director of the Bank in October 2006. at both AMP and BZW Australia, consulting Director at Rothschild Australia Officer, and Director of Linfox Pty He has been a non-executive Director where he was promoted to Managing Limited. He was previously a Managing Ltd, culminating in his appointment of a number of ASX listed companies Director – Financial Markets in 1995 Director at Citigroup where he worked as Executive Chairman of Fox Group and he is currently a non-executive and became Chief Executive in 1996. In for over 20 years and more recently Holdings in 1994. Mr Fox was appointed Director of Bandanna Energy Limited. 1998, when RBS Group (Australia) Pty was a Group Managing Director at ANZ a Director of the Bank in May 2001. He is He is Chairman of DDH Graham Limited (formerly ABN AMRO Australia Bank. He is a Director of Macquarie also a Director of the Alfred Foundation Limited, an advisory and funds Pty Limited) acquired BZW Australia Office Management Ltd, Ardent Leisure and a member of the Australian Graduate management company he founded in and New Zealand, Steve became Chief Management Ltd and Ardent Leisure School of Management Advisory Council 1981. He is a member of the Audit and Executive and remained in this role until Ltd, Aristocrat Leisure Ltd, Territory (UNSW). He is a member of the Bank’s Budget Committees. his retirement in June 2003. Steve is now Insurance Office and Trust Ltd. He was Budget Committee. a member of RBS Group’s (Australia) formerly Chair of Pengana Hedgefunds Advisory Council and a Director of Ltd and Esanda, and a Director of ANZ Transfield Services, APA Ethane Limited, (New Zealand) Limited, CitiTrust in The Sunnyfield Association, Taronga Japan and Citicorp Securities Inc. in the Conservation Society Australia, Australian USA. He has a Bachelor of Economics Reward Investment Alliance, and (Hons) degree from the University Chairman of Global Valve Technology of Sydney, a Master of Philosophy Limited. Mr Crane is a member of degree from Oxford and is a Rhodes the Bank’s Corporate Governance Scholar. Mr Davis is a member of the Committee and the Chair of the Risk Committee. Budget Committee.

19 Carmel Gray Bill Kelty, AC John Reynolds

B Bus B Econ B Sc (Hons), Dip Ed, FAICD, FAIM Non-Executive Independent Non-Executive Non-Independent Non-Executive Independent Director – Age: 60 Director – Age: 61 Director – Age: 66

Carmel Gray was appointed a Director Bill Kelty has over 32 years’ experience in John Reynolds was appointed a Director of the Bank on 6 April 2006. Ms Gray industrial relations. He was appointed a of the Bank in April 2003. He has had has had an extensive career in IT and Director of the Bank in August 2001 and extensive CEO-level experience at Top Banking. Ms Gray was Group Executive is currently a Director of the Linfox Group 100 media and resource companies Information Technology at Suncorp from and a Commissioner of the Australian in Australian and overseas. He is 1999 to 2004. Prior to her Suncorp Football League. He is also involved in Chairman of Arrow Energy Limited. He appointment she was General Manager of the Foundation for Rural and Regional is a Director of Mater Health Services Energy Information Solutions Pty Ltd and Taskforce and was previously Chairman Brisbane Limited and an advisor to various Managing Director of Logica Pty Ltd. Ms of the Federal Government’s Regional private companies and professional Gray is Chair of Information Technologies Development Taskforce. Mr Kelty was organisations. Mr Reynolds is Chairman Australia Pty Ltd. Ms Gray is a member of Secretary of the Australian Council of of the Bank’s Risk Committee, a member the Bank’s Risk Committee and the Chair Trade Unions from 1983-2000 and a of the Audit Committee and a member of the Audit Committee. member of the Reserve Bank Board from of the Bank’s Remuneration and 1988-1996. He is Chair of the Bank’s Nomination Committee. Corporate Governance Committee.

20 Remuneration overview

Short-term Post- Other Termination Shares-based Directors employment long-term benefits payments Total $ $ $ $ $ $ Non-Executive Directors Neil Summerson 231,500 23,217 - - - 254,717 Anthony Howarth 117,917 10,613 - - - 128,530 Steve Crane1 67,500 6,075 - - - 73,575 Roger Davis 112,083 10,088 - - - 122,171 Peter Fox 90,000 8,789 - - - 98,789 David Graham 155,814 14,023 - - - 169,837 Carmel Gray 135,083 12,158 - - - 147,241 Bill Kelty 97,833 9,416 - - - 107,249 John Reynolds 154,500 13,924 - - - 168,424 Former Director Antony Love2 33,333 3,000 188,661 - - 224,994 Executive Director David Liddy 2,238,230 13,829 56,994 - - 3,788,132 1 Commenced 11 December 2008 2 Retired 11 December 2008

Post- Other Termination Share-based Executives Short term payments Total employment long-term benefits $ $ $ $ $ $ Executives Ram Kangatharan 777,837 13,829 815 247,277 1,039,758 David Marshall 546,425 39,206 747 144,549 730,927 Daniel Musson 456,853 35,293 625 143,449 636,220 Jim Stabback 460,260 34,147 388 14,476 509,271 Bruce Auty 414,444 41,581 4,077 236,502 696,604 Former Executive Robert Hines1 518,598 30,863 - 651,998 476,412 1,677,871 Len Stone2 230,750 49,000 - 734,214 395,791 1,409,755 1 Resigned on 9 April 2009 2 Resigned on 29 May 2009

21 Achievement

22 > The OMB network is proving > Bad debts are tracking upwards its resilience and productivity in along with the economic the toughest of conditions. downturn but are likely to > We expect to continue to remain below banking peers. grow profitably all aspects > Management is expecting a of our business ahead of our gradual net interest margin competitors while maintaining improvement in the 2010 pricing and credit disciplines. financial year. > We have executed a series of > A dividend payout ratio of efficiency initiatives that give 50 to 60% is expected to us line of sight to achieving remain while challenging a cost-to-income ratio that market conditions continue challenges the major banks even and pending resolution of our at a fraction of their size and strategic ambitions. without the benefit or risk of corporate lending.

23 Financial calendar

2009 2010 PEPS (BOQPC)* Announcement date 17 March 2010 Ordinary shares (BOQ)* Ordinary shares (BOQ)* Ex-dividend date 22 March 2010 Ex-dividend date 13 November 2009 Interim results and interim 15 April 2010 dividend announcement Record date 26 March 2010 Record date 19 November 2009 Ex-dividend date 28 April 2010 Payment date 15 April 2010 Final dividend payment date 1 December 2009 Record date 4 May 2010 Announcement date 20 September 2010 Annual General Meeting 10 December 2009 Interim dividend payment date 18 May 2010 Ex-dividend date 23 September 2010 Final results and final dividend 14 October 2010 announcement Record date 29 September 2010 Ex-dividend date 12 November 2010 Payment date 15 October 2010 Record date 18 November 2010 * Dates are subject to change Final dividend payment date 2 December 2010 Annual General Meeting 9 December 2010

RePS (BOQPA)* Announcement date 17 March 2010 Ex-dividend date 22 March 2010 Record date 26 March 2010 Payment date 15 April 2010 Announcement date 20 September 2010 Ex-dividend date 23 September 2010 Record date 29 September 2010 Payment date/ 15 October 2010 Dividend reset date

24 New share registry Registered office Annual General Meeting On Monday, 29 June 2009 Bank of Bank of Queensland Limited The 2009 Annual General Meeting Queensland changed share registries to: Level 17, BOQ Centre will be held at the Sofitel Hotel, 249 259 Queen Street Turbot Street, Brisbane on Thursday, Link Market Services Limited Brisbane Qld 4000 10 December 2009 (registration Level 19, 324 Queen Street Telephone: (07) 3212 3333 commences at 9.15am). Brisbane Qld 4000 Facsimile: (07) 3212 3399 Australia: 1800 779 639 Website: www.boq.com.au International: +61 2 8280 7626 Facsimile: +61 2 9287 0303 Investor Relations: (07) 3212 3463 Email: [email protected] Customer Service: 1300 55 72 72 Website: www.linkmarketservices.com.au E-communications Australian Business and Register now to receive Annual Reports, Company Numbers dividend advices and other company information from Bank of Queensland ABN 32 009 656 740 by email. By registering for this free ACN 009 656 740 service, you can receive significant company announcements as they happen. Furthermore, by reducing printing, there are significant cost savings for the Bank and you are helping to save the Australian environment. To register please call the share registry on 1800 779 639. Growth. Evolution. Achievement.