BOQ Sets AUD 1.3006 Quarterly Distribution at 5.22% Annualised Rate
Bank of Queensland Limited has announced a fully franked quarterly distribution of AUD 1.3006 per Capital Note security, payable in February 2026. This reflects the bank’s ongoing commitment to rewarding investors amid stable market conditions.
- AUD 1.3006 fully franked distribution per Capital Note
- Distribution based on 3-month Bank Bill Swap Rate plus 3.80% margin
- Payment date set for 16 February 2026
- No additional approvals required for payment
- Distribution subject to bank’s discretion and payment conditions
Distribution Details and Context
Bank of Queensland Limited (ASX, BOQ) has declared an ordinary quarterly distribution of AUD 1.3006 per Capital Note security (BOQPF), fully franked at the corporate tax rate of 30%. The distribution covers the period ending 15 February 2026, with the payment scheduled for 16 February 2026. Investors holding these perpetual, non-cumulative capital notes can expect this payment, subject to the bank’s discretion and satisfaction of payment conditions outlined in the Capital Notes 2 Prospectus.
How the Distribution Rate is Calculated
The distribution rate is derived from the 3-month Bank Bill Swap Rate (BBSW) observed on the first business day of the distribution period, plus a fixed margin of 3.80%. For this quarter, the total annualised distribution rate stands at 5.2167%, reflecting the formula stipulated in the Capital Notes 2 terms. The rate is adjusted to account for franking credits, which enhance the after-tax return for Australian investors by effectively reducing the tax paid on the distribution.
Implications for Investors and Market
This announcement signals Bank of Queensland’s continued commitment to maintaining attractive returns for holders of its capital notes, a key component of its capital management strategy. The fully franked nature of the distribution is particularly appealing to Australian investors seeking tax-efficient income streams. Importantly, no additional approvals, such as security holder or court approvals, are required for this payment, underscoring the routine nature of this distribution within the bank’s established framework.
Looking Ahead
While the payment is subject to the bank’s absolute discretion and compliance with payment conditions, the consistency of these distributions provides a degree of predictability for investors. Market watchers will be keen to monitor any changes in the BBSW or margin settings in future periods, as these will directly influence the income generated from these securities. Additionally, any shifts in regulatory or economic conditions could impact the bank’s capital management decisions going forward.
Bottom Line?
Bank of Queensland’s steady distribution reinforces its capital strategy but leaves investors watching for future rate shifts.
Questions in the middle?
- Will the Bank of Queensland maintain the current margin on Capital Notes in upcoming periods?
- How might changes in the Bank Bill Swap Rate affect future distributions?
- Are there any emerging risks that could impact the bank’s discretion to pay distributions?
