Bank of Queensland’s multimillion-dollar hit from virus and underpayments to staff
The coronavirus pandemic and revelations of a staff underpayment scandal have cost the Bank of Queensland millions of dollars.
Banking
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Bank of Queensland has warned revelations of staff underpayments in combination with the financial dents sparked by the coronavirus pandemic has cost it millions.
In a statement to the Australian Stock Exchange on Tuesday morning, the regional bank said it had provisioned for a $175 million loan impairment expense that would bruise its profit for the 2020 financial year.
BOQ is expected to deliver its results on October 14, with $133 million of the expense relating to costs associated with the economic impacts of COVID-19.
A further $11 million relates to staff remuneration underpayments and issues with the bank not paying enough superannuation to employees.
The bank’s anticipated losses are being driven by a higher unemployment rate, downgrades in property prices and a prolonged economic downturn.
BOQ chief executive George Frazis said the bank was committed to continue supporting customers despite multimillion-dollar losses incurred to its portfolio.
“As we all know, this has been an unprecedented year, and BOQ is committed to supporting our customers throughout this period,” he said.
“We are very pleased to see many of our customers returning to work and reopening their businesses and will continue to work closely with those that require further assistance.”
The bank flagged underpayments related to people employed under three of its enterprise agreements from 2010 to 2018.
Its internal review found “irregularities” in superannuation payments made to employees. The bank has advised the Fair Work Ombudsman and the Financial Services Union it is engaged with third parties to investigate the full impact of the issue.
Mr Frazis said the bank was apologetic about the remuneration failures and rectifying the issues was an “absolute priority”.
“We will get this right and we will make sure our people, past and present, receive every cent they are owed,” he said.
BOQ noted the overall impairment expense equated to 37 basis points of its gross loan book value.
The bank also noted it would make a decision on paying a dividend to shareholders at it full-year results announcement in October.
Originally published as Bank of Queensland’s multimillion-dollar hit from virus and underpayments to staff