On Tuesday morning, Bank of Queensland [ASX:BOQ] held its 2022 AGM meeting, in which the company Chairman Patrick Allaway provided his address — emphasising much-needed strategies to improve the bank’s general performance.
Interestingly, Allaway also revealed the abrupt release of BOQ’s Chief Executive Officer George Frazis, hinting at a less than favourable relationship with the board and the chairman himself.
The bank’s shares were mostly flat in the afternoon, and BOQ is marked down at an 11% discount year-to-date.
In its sector, the bank is also trending 8% down and 6% below the market average.
Bank of Queensland’s CEO overthrown amid strategy shake-up
Earlier today, the bank held its annual general meeting for the year of 2022, with a focus on its 2020 strategy plan, ‘digital transformation’, and goals for the coming new year.
First on the agenda, Chairman Allaway announced the immediate departure of the company’s CEO, revealing the search for Mr Frazis’ replacement has already begun, stating:
‘I know this leadership change would have come as a surprise to many and I want to explain the Board’s decision directly to you.
‘While we respect and acknowledge the contribution that George Frazis has made over his three years with BOQ, the Board reached a conclusion that we need a different capability and leadership style to build a simpler and more resilient bank. Our expectations, in respect of this were made clear to George over a period of time.’
Allaway described a ‘sub-optimal’ performance under Frazis’ leadership, explaining that his capabilities and style were evidently not living up to expectations.
BOQ’s plan has been focused on building up digital and data elements and chasing a simple and resilient foundation with updated frameworks and processes regarding a changing and difficult economic cycle.
Allaway acknowledged the problematic position an abrupt CEO departure might pose; however, he also revealed Frazis ‘did not have the ongoing support of the board’, and for the sake of stability, the quick decision was made.
The bank is now actively looking for a replacement CEO and managing director, a process which could take up to nine months.
In the meantime, Allaway has taken the executive chair seat, and Karen Penrose has become the lead independent director. Allaway explained:
‘My appointment as Executive Chair is of an interim nature to retain stability as I intend to return to my role on the Board in a non-executive capacity as soon as a new CEO commences.
‘Our ambitious vision and strategy for BOQ remains unchanged. We are in a strong financial position and by strengthening our operational resilience and risk culture we will further strengthen our ability to transform in a sustainable manner.’
BOQ banking and business
BOQ, like many, has endured a difficult year navigating continuing challenges relating to COVID-19, inflation pressure, labour shortages, and rising interest rates.
Severe floods and extreme weather also brought their own set of problems.
These events have caused the bank to tighten its strategies and focus, including its digital transformation (i.e., the myBOQ app and existing Virgin Money app), which has improved customer acquisition and deposit accounts — reportedly nine times on the monthly average.
BOQ previously reported a statutory profit of $426 million and after-tax cash earnings for the year of $508 million, representing 78.4 cents in earnings per share, and believes it’s well positioned for a more difficult economic environment, despite recent challenges.
The bank extended this confidence to the broader Australian financial market, also believed to be well-placed to deal with the uncertain economic challenges.
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For The Daily Reckoning Australia