The Bank of Queensland Limited (ASX: BOQ) share price has sunk 5% after the regional bank announced that its CEO is leaving the bank.
BOQ CEO’s instant departure
George Frazis is leaving the bank “effective today”, though he will receive his entitlements in accordance with the terms of his contract of employment.
The BOQ chair Patrick Allaway has taken on the role of executive chair for the time that the bank goes through a search for a new executive. Current BOQ non-executive director Karen Penrose will be the lead independent director.
The reason for the chair’s appointment to the executive role is to retain stability, and ensure that the executive leadership team can stay focused on their current roles and responsibilities.
BOQ’s board noted that it has formed a view that different leadership is now required to ensure BOQ can continue to build a “stronger and more resilient bank through future cycles.”
Choosing a new CEO and managing director could take up to nine months.
Areas of focus for the bank
While the bank acknowledges that continued growth “remained important” and would be “embedded in BOQ’s strategy”, the bank would have other areas of focus.
The BOQ pointed out that its asset quality, capital and liquidity buffers remain “sound”. But, heading into a more challenging economic cycle, the bank will prioritise further strengthening its financial and operational resilience.
It will also continue to work with regulators to advance maturity in risk behaviours and architecture to strengthen its management framework and practices, including BOQ’s control environment in regards to non-financial risk.
BOQ will continue investing in technology to build a cloud-based digital and data-led scalable bank. It’s going to move off multiple complex legacy systems to reduce its reliance on manual processes.
The bank is focused on optimising its performance, through “simplification, productivity, disciplined execution and optimising returns.”
Final thoughts on the BOQ share price
Despite the higher interest rates, BOQ shares are down 14% in 2022, so from that side of things, I think BOQ could be a better choice among the banks with a larger dividend yield. Being prudent during this time could be important for the longer-term returns.
