BOQ Sets 5.3% Annualised Distribution Rate for Capital Notes 3

Distribution Details and Timing

Bank of Queensland Limited (ASX:BOQ) has declared an ordinary quarterly distribution of AUD 1.3218 per security on its Capital Notes 3 (ASX:BOQPG). The payment is scheduled for 15 June 2026, with an ex-date of 27 May and a record date of 28 May. This distribution covers the period ending 14 June 2026.

Fully Franked Dividend Reflecting Tax Efficiency

Notably, the distribution is fully franked, meaning it carries a 30% corporate tax credit. This full franking enhances the after-tax return for Australian investors, reflecting BOQ’s strong franking account position and commitment to delivering tax-efficient income streams.

Calculation of Distribution Rate

The distribution rate is calculated based on the 3-month Bank Bill Swap Rate (BBSW) observed on the first business day of the payment period, plus a margin of 3.40%. This results in an annualised distribution rate of approximately 5.3017%. The margin was determined through a bookbuild process at the time of the Capital Notes 3 issuance in November 2022.

Payment Conditions and Capital Management Context

Payment of this distribution remains subject to BOQ’s absolute discretion and the satisfaction of specific payment conditions outlined in the Capital Notes 3 Prospectus dated 1 November 2022. These conditions are designed to ensure the bank maintains adequate capital levels and financial stability, aligning with regulatory requirements and prudent capital management practices.

Investor Implications

For investors, this announcement confirms a steady income stream from BOQ’s hybrid capital instrument, supporting portfolio yield in a low-interest environment. However, the discretionary nature of the payment and underlying capital conditions mean investors should monitor future announcements closely for any changes or deferrals.