The Bank of Queensland has come out in defence of the state's property market, telling Australian Broker Online there hasn’t been an increase in bad debts despite it predicting a major profit loss.
The comments come after the regional bank announced it would post another loss in the second half of the year, making it the first bank in Australia to post a full-year loss in 20 years.
However, despite reports yesterday the loss was due to a struggling property market in south-east Queensland, a Bank of Queensland spokesperson said the bank was simply being “prudent.”
“It is important to note that the decision to increase our provisioning is not because we have had an increase in bad debts, we are simply protecting ourselves for the future.
“This is a responsible and prudent approach to doing business,” she told Australian Broker Online.
Furthermore, she said there has been “no material deterioration in the portfolio in the second half.”
“There have been no significant new impaired assets identified in the second half in the commercial and property finance portfolios.”
The spokesperson speculated things would gradually improve in south-east Queensland due to both rate cuts and a strengthening economy.
“We have seen tentative signs of recovery in the residential and commercial property markets.”