Could it be that the Bank of Queensland (BOQ) finally is emerging from its trouble plagued past?
Legacy issues, as they are politely called, have dogged the bank's performance ever since the financial crisis, after BOQ last year attained the dubious honour of being the only Australian bank to record a loss in the past 20 years.
Ever since the financial crisis, BOQ has battled to rein in its bad debts, lower its risk profile and overcome the reputational fallout from the bank's disastrous flirtation with the collapsed Storm Financial.
While it has quite some way to go, the stars at last are beginning to align.
This morning's better than expected $250.9 million cash earnings stands starkly in contrast to last year's $185.8 million loss, driven largely by massive reduction in bad debt. And shareholders have been rewarded with a 30c final dividend, taking the total payout to 58c, up 12% on last year.
Impairment expenses dropped 71% to $114.6 million while action has been taken to identify arrears in the retail lending portfolio earlier than previously. The lower interest rate environment has helped in this regard.
Chief executive Stuart Grimshaw, however, was less than upbeat about the year ahead, forecasting similar conditions to the past year. The Aussie dollar was still too high, he said, although the recent fall has gone some way towards boosting Queensland's near dormant tourist industry.
But he was confident the new lower risk lending profile, the strategy of targeting small and medium enterprises as a competitive niche and establishing extra distribution channels through mortgage brokers and the hook-up with Virgin Money would continue to lift revenue and earnings.
Lending growth, while modest a 3%, was more than covered by growth in retail deposits with the deposit to loan ratio rising to 68%, up four points from last year.
The improved performance and more conservative approach to both costs and lending have been recognised by stockbrokers with many upgrading sell recommendations to either neutral or even buy.
Ratings agency Standard & Poors has upgraded BOQ's credit rating twice in the past 15 months and now stands at A-.