Bank of Queensland : HY17 Investor information including Appendix 4D

CONFIDENTIAL INTERNAL DRAFT NOT FOR DISTRIBUTION

1

BOQ

INVESTOR INFORMATION

2017 HALF YEAR RESULTS

INCORPORATING THE REQUIREMENTS OF APPENDIX 4D

BOQ GROUP - 2017 HALF YEAR RESULTS

ASX APPENDIX 4D

Results for announcement to the market (1)

Revenues from ordinary activities (2) Down 5% to 532

Profit from ordinary activities after tax attributable to members (2) Down 6% to 161

Profit for the year attributable to members (2) Down 6% to 161

Interim ordinary dividend - fully franked (cents per share) 21 April 2017 38

First half 2017 Convertible Preference Shares - fully franked (cents per share) 30 March 2017 249

(1) Rule 4.2A.3. Refer to Appendix 5.1 for the cross reference index for ASX Appendix 4D.

(2) On prior corresponding period (six months ended 29 February 2016).

BOQ GROUP - 2017 HALF YEAR RESULTS

2 INVESTOR INFORMATION HALF YEAR 2017

BOQ GROUP - 2017 HALF YEAR RESULTS

APPENDIX 4D 2

1 HIGHLIGHTS & STRATEGY 4

1.1 DISCLOSURE CONSIDERATIONS 4

1.2 GROUP HIGHLIGHTS 5

1.3 STRATEGY 7

2 GROUP PERFORMANCE ANALYSIS 8

2.1 INCOME STATEMENT & KEY METRICS 8

2.2 NET INTEREST INCOME 10

2.3 NON-INTEREST INCOME 11

2.4 INSURANCE OVERVIEW 11

2.5 OPERATING EXPENSES 12

2.6 CAPITALISED INVESTMENT 14

2.7 LENDING 14

3 BUSINESS SETTINGS 19

3.1 ASSET QUALITY 19

3.2 FUNDING AND LIQUIDITY 24

3.3 CAPITAL MANAGEMENT 27

3.4 TAX EXPENSE 27

4 CONSOLIDATED INTERIM FINANCIAL REPORT 28

DIRECTORS' REPORT 28

DIRECTORS DETAILS 28

PRINCIPAL ACTIVITIES 28

REVIEW OF OPERATIONAL AND FINANCIAL RESULTS 28

OTHER MATTERS 29

LEAD AUDITOR'S INDEPENDENCE DECLARATION 30

CONSOLIDATED INCOME STATEMENT 31

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 32

CONSOLIDATED BALANCE SHEET 33

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 34

CONSOLIDATED STATEMENT OF CASH FLOWS 36

CONDENSED NOTES TO THE CONSOLIDATED INTERIM FINANCIAL REPORT 37

4.1 BASIS OF PREPARATION 37

4.2 FINANCIAL PERFORMANCE 39

4.3 CAPITAL AND BALANCE SHEET MANAGEMENT 41

4.4 CONTROLLED ENTITIES 46

4.5 OTHER NOTES 47

DIRECTORS' DECLARATION 48

INDEPENDENT AUDITOR'S REVIEW REPORT TO THE MEMBERS OF BANK OF QUEENSLAND LIMITED 49

5 APPENDICES50

BOQ GROUP - 2017 HALF YEAR RESULTS

Bank of Queensland Limited and its Controlled Entities ABN 32 009 656 740 AFSL NO. 244616 3

BOQ GROUP - 2017 HALF YEAR RESULTS

1. HIGHLIGHTS & STRATEGY

1.1 DISCLOSURE CONSIDERATIONS

Future performance

This document contains certain 'forward looking statements' about BOQ's business and operations, market conditions, results of operations, and financial condition, capital adequacy and risk management practices which reflect BOQ's views held as at the date of this document.

Forward looking statements can generally be identified by the use of forward looking words such as 'anticipate', 'believe', 'expect', 'project', 'forecast', 'estimate', 'likely', 'intend', 'should', 'will', 'could', 'may', 'target', 'plan' and other similar expressions.

Forward looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of BOQ and which may cause actual results to differ materially from those expressed or implied in such statements. Readers are cautioned not to place undue reliance on any forward looking statements. Actual results or performance may vary from those expressed in, or implied by, any forward looking statements.

Rounding

In accordance with applicable financial reporting regulations, amounts in this report have been rounded off to the nearest one million dollars, unless otherwise stated. Any discrepancies between total and sums of components in tables contained in this report are due to rounding.

Note on Statutory Profit and Cash Earnings

Statutory Profit is prepared in accordance with the Corporations Act 2001 and the Australian Accounting Standards, which comply with International Financial Reporting Standards ('IFRS'). Cash Earnings is a non-Accounting Standards measure commonly used in the banking industry and assists in presenting a clear view of the Bank's underlying earnings. Refer to Section 5.2 of the Appendices for the Reconciliation of Statutory Profit to Cash Earnings.

The items excluded from Cash Earnings are consistent with the prior period (Refer to the Reconciliation of Statutory Profit to Cash Earnings chart below). Integration costs relate to the acquisition of BOQF Cashflow Finance Pty Ltd (formerly known as Centrepoint Alliance Premium Funding Pty Ltd).

Hedge ineffectiveness represents earnings volatility from hedges that are ineffective under the application of IAS 39 Financial Instruments and create a timing difference in reported profit, where these hedges remain economically effective.

Figures disclosed in this report are on a Cash Earnings basis unless stated as Statutory Profit basis. Unless otherwise stated, all financial comparisons in this document refer to the prior half (to 31 August 2016) and the prior corresponding half (to 29 February 2016).

These non-statutory measures have not been subject to review or audit.

RECONCILIATION OF STATUTORY PROFIT TO CASH EARNINGS ($M)

Statutory Net Profit Amortisation of acquisition Hedgeineffectiveness Integration / transaction Legacyitems Cash Earnings after after Tax fair value adjustments costs Tax

BOQ GROUP - 2017 HALF YEAR RESULTS

4 INVESTOR INFORMATION HALF YEAR 2017