#1For personal use only FY21 INVESTOR MATERIALS BOQD GROUP 13 October 2021 Full Year ended 31 August 2021 BANK OF QUEENSLAND LIMITED ABN 32 009 656 740. AFSL NO 244616.#2For personal use only CONTENTS FY21 RESULTS PRESENTATION ABOUT BOQ DIVISIONAL RESULTS ME BANK PORTFOLIO QUALITY CAPITAL, FUNDING & LIQUIDITY ECONOMIC ASSUMPTIONS Bank of Queensland Limited 2021 Full Year Results Presentation BOQD GROUP 3 35 41 45 49 62 565 2#3For personal use only FY21 RESULTS PRESENTATION 13 October 2021 Full Year ended 31 August 2021 BANK OF QUEENSLAND LIMITED ABN 32 009 656 740. AFSL NO 244616. BOQD GROUP#4For personal use only AGENDA INTRODUCTION Cherie Bell, General Manager Investor Relations & Integration RESULTS OVERVIEW George Frazis, Managing Director and CEO FINANCIAL DETAIL, TRANSFORMATION & INTEGRATION Ewen Stafford, Chief Financial Officer and Chief Operating Officer SUMMARY & OUTLOOK George Frazis, Managing Director and CEO Q&A George Frazis, Managing Director and CEO Ewen Stafford, Chief Financial Officer and Chief Operating Officer Martine Jager, Group Executive Retail Bank and CEO ME Bank Executive Team & Senior Leaders Bank of Queensland Limited 2021 Full Year Results Presentation BOQD GROUP 4#5For personal use only FY21 RESULTS PRESENTATION GEORGE FRAZIS EWEN STAFFORD MARTINE JAGER Managing Director and Chief Executive Officer • Joined BOQ in September 2019 • More than 26 years of experience • • Previously CEO Westpac Group's Consumer Bank, CEO St. George, CEO Westpac New Zealand Limited, CFO Institutional Bank, CBA, NAB Business and Private Bank Started in the RAAF as an engineer then a partner at BCG Chief Financial Officer and Chief Operating Officer Joined BOQ in November 2019 More than 30 years of experience across financial services, telecommunications, eCommerce and logistics, commercial property and professional services Previously held roles at KPMG, MLC, NAB, Australia Post, Telstra, Loan Market, Deloitte Group Executive Retail Bank and CEO of ME Bank Joined BOQ in April 2021 Previously held a number of executive roles including CEO of RAMS, Chief Digital and Marketing Officer for Westpac Group and General Manager third party Mortgage Broking at St George Bank of Queensland Limited 2021 Full Year Results Presentation BOQD GROUP 5#6For personal use only RESULTS OVERVIEW BOQD GROUP GEORGE FRAZIS MANAGING DIRECTOR AND CEO#7For personal use only FY21 OVERVIEW BOQD GROUP 1. Strong FY21 statutory profit and cash earnings reflecting balance sheet growth, margin management and improved economic conditions Including 2 months of ME Bank, statutory profit of $369m up 221%, cash earnings after tax up 83% and EPS growth of 51%¹ Excluding ME Bank statutory profit of $352m up 206%, cash earnings after tax up 73% 2. Business momentum continues to build, with quality housing growth at 1.7x system, and with good margin and cost management 3. Continuing to support our customers and people through ongoing COVID-19 challenges and maintaining business resilience 4. Delivering the strategic transformation over the past 2 years with the first phase of the digital bank in market 5. Acquisition of ME Bank completed, operating model integrated, improvement programs for profitable growth in place, plan to accelerate synergies 6. Asset quality remains sound with collective provision levels conservatively reduced in line with improved economic outlook 7. Capital strength to support business growth and transformation with CET1 of 9.80% 8. Final dividend of 22cps, bringing the FY21 full year dividend to 39cps, representing a 61% payout ratio² Bank of Queensland Limited 2021 Full Year Results Presentation (1) On prior comparative period. The basic cash earnings per share for all prior periods have been adjusted for the effects of the Group's capital raise in March 2021 7 (2) Dividend payout ratio is based on cash earnings. Record date for the 2H21 final dividend is 29 October 2021#8For personal use only FY21 RESULTS HIGHER CASH PROFIT DRIVEN BY STRONG QUALITY ASSET GROWTH AND MARGIN MANAGEMENT Key Financial Results FY21 BOQD GROUP FY20 FY21 v FY20¹ BOQ excluding ME Bank FY21 vs FY20 221% 352 206% Statutory net profit after tax ($m) 369 115 Cash earnings after tax ($m) Cash return on average equity (%)² 412 225 83% 389 73% 8.2 5.4 280bps Return on average tangible equity (%) 2,3 10.2 6.9 330bps ▲ Common Equity Tier 1 ratio (%)² 9.80 9.78 2bps Cash earnings per share²,4 Dividend per share 74.7c 49.6c 51% 39c 12c5 27c (1) PCP does not include comparative earnings for ME Bank (2) Including earnings from ME Bank for the period 1 July 2021 to 31 August 2021 (3) Based on after tax earnings applied to average shareholders' equity (excluding shares and treasury shares) less goodwill and identifiable intangible assets (customer related intangibles/brands and computer software) Bank of Queensland Limited 2021 Full Year Results Presentation (4) The basic cash earnings per share for all prior periods have been adjusted for the effects of the Group's capital raise in March 2021 (5) BOQ paid a FY20 dividend of 12c, which represented 6c from 1H20 profits and 6c from 2H20 profits 8#9For personal use only KEY ELEMENTS OF THE RESULT¹ INCOME GROWTH WITH GOOD MARGIN MANAGEMENT, IMPROVED PRODUCTIVITY AND IMPAIRMENT RELEASES BOQD GROUP NET INTEREST INCOME ($M) FY20 $986m NET INTEREST MARGIN (%) +6% FY21-$1,050m FY20 -1.91% +5% 538 512 503 483 1H20 2H20 COST TO INCOME RATIO (%)² 1H21 2H21 -120bps 55.0 54.9 54.5 53.3 1H20 2H20 1H21 2H21 (1) Excluding ME Bank +4bps 1.92 1.95 1.89 1H20 flat FY21 -1.95% 1.95 2H20 1H21 2H21 LOAN IMPAIRMENT EXPENSE ($M) 147 28 2 26 126 (44) 24 21 28 21 (4) (65) 1H20 2H20 1H21 2H21 Specific Collective 1H20 2H20 1H21 2H21 Loan Impairment to GLA 12bps 62bps 10bps (17bps) Excluding material collective provisions(3) 8bps 10bps 10bps 12bps Bank of Queensland Limited 2021 Full Year Results Presentation (2) VMA costs have been restated from non-interest income and included in operating expenses (3) Loan impairment to GLA excludes material collective provisions adjustments, 1H20 $10m, 2H20 $123m and 2H21 -$75m 9#10For personal use only LENDING AND DEPOSIT GROWTH1 STRONG ABOVE SYSTEM GROWTH IN HOME LENDING WITH A TURNAROUND IN THE BUSINESS BANK BOQD GROUP GROWTH IN LENDING GLAS ($M)² GROWTH IN CUSTOMER DEPOSITS ($M) 3,546 3,270 2,334 198 2 759 400 1,103 1,537 827 1,112 264 937 141 151 659 15 2,946 239 1,364 1,399 343 600 508 (567) (14) (39) FY19 FY20 FY21 FY19 FY20 FY21 Housing ■Commercial Consumer Asset finance³ ■Retail Bank Business Bank Other Deposits4 GROWTH IN HOUSING GLAS ($M) GROWTH IN BUSINESS LENDING GLAS ($M) 2,946 810 141 508 1,430 626 476 508 914 714 1,040 (1,399) (714) 154 358 598 659 198 15 249 237 400 106 151 FY19 FY20 FY21 Virgin Money BOQ Specialist Housing BOQ Housing5 (1) Excluding ME Bank (3) FY19 FY20 FY21 ■BOQ Specialist Commercial ■BOQ Commercial Asset Finance³ Bank of Queensland Limited 2021 Full Year Results Presentation (4) Other Deposits mainly includes treasury deposits (5) BOQ Housing includes housing loan growth in both the Retail Bank and BOQ Business (2) BOQ Specialist working capital products have been reclassified from consumer to commercial lending for all periods (3) BOQ Specialist Asset Finance products have been reclassified from commercial lending for all periods 10#11For personal use only QUALITY HOME LENDING GROWTH¹ GOOD QUALITY ABOVE SYSTEM GROWTH IN HOME LENDING SUMMARY • 1.7x system growth in home lending achieved in FY21 • BOQ Housing³, BOQ Specialist and Virgin Money contributing to strong lending volumes · Prudent risk settings maintained ensuring quality growth . Time to yes standards improving after increased volumes during the second half BOQD GROUP HOME LENDING GROWTH ($M) 2,946 1,949 508 141 1,120 507 997 39 102 310 287 339 459 248 228 49 469 445 489 459 581 225 (717) (682) (441) (273) 1H19 2H19 1H20 2H20 ■Virgin Money ■BOQ Specialist Housing 1H21 2H21 ■ BOQ Housing³ • Consumer NPS ranked 3rd (up from 5th in FY19), Mortgage NPS ranked joint 4th (up from 11th in FY19)² Broker and customer experiences improved, reflecting NPS result QUALITY HOME LENDING GROWTH Quality Growth Portfolio FY20 Portfolio FY21 Flow FY21 LVR > 90% 6% 5% 3% • Broker channel growth of $1.1bn driven by new and existing quality aggregators 90 Days past due 85bps 55bps Interest only %4 19% 16% 13% Investor 39% 37% 32% 68% 72% 81% 21% • Enhanced geographic diversification with Queensland housing portfolio concentration reducing (1) Excluding ME Bank PAYG DTI >6x Serviceability buffer (2) RFI XPRT Report, August 2021 and August 2019 Bank of Queensland Limited 2021 Full Year Results Presentation (3) BOQ Housing includes housing loan growth in both the Retail Bank and BOQ Business (4) Excluding construction loans (5) 2.5% will be increased to 3% by the end of October 2021 Higher of 5.35% or 2.5% above customer interest rate5 11#12For personal use only DIVISIONAL ACHIEVEMENTS1 RETAIL BANK BOQ Housing Loan Growth ($m)² Viryia money Deposit Growth ($m) BUSINESS BANK BOQB Loan Growth ($m) BOQ BUSINESS BOQ SPECIALIST BOQ FINANCE Deposit Growth ($m) BOQD GROUP (4) FY20 2,479 1,363 1,399 FY21 Total income up 10% to $561m FY20 FY21 BOQ Housing loan growth of 1.7x system. Growth delivered across all channels Green shoots with ME Bank application volumes up 36% in August and September through introduction of Home Buying Transformation program and centralised pricing Deposit growth of $1.4bn, accelerating into the second half Consumer NPS ranked 3rd (up from 5th in FY19), Mortgage NPS ranked joint 4th (up from 11th in FY19) 4 Time to yes standards improving following increased volumes during the second half All owner managers on new revenue share agreement driving alignment Bank of Queensland Limited 2021 Full Year Results Presentation 1,065 870 467 512 400 343 1,536 1,112 198 15 FY20 FY21 Asset Finance Commerical Housing³ FY20 FY21 Total income up 3% to $603m • Continued focus on niche segments • • • $1.1bn lending growth delivered across all channels Ongoing deposit growth of $1.1bn funding asset growth for the year Customer experience remains high, SME NPS ranked 3rd (up from joint 4th in FY19)5 Supported customers through COVID-19 with a personalised approach (1) Excluding ME Bank (2) BOQ Retail Bank housing loan growth includes BOQ Retail plus VMA (3) BOQB housing loan growth includes SME home lending plus BOQS (4) RFI XPRT Report, August 2021 and August 2019 DBM Atlas Report August 2021 and August 2019. SME NPS refers to Any Financial Relations (AFR) and businesses under $40m turnover (6) Compared to FY21 volumes 12#13RETAIL BANK DIGITAL TRANSFORMATION TRANSFORMATION ON TRACK AND PROGRESSING AS PLANNED BOQD GROUP BUILDING THE RETAIL DIGITAL BANK OF THE FUTURE Phase 1 - Foundational Capabilities • Key banking partnerships established • For personal use only FUTURE FOCUS FY24+ IN PROGRESS FY22 - FY23 COMPLETE FY20-FY21 • • Cloud based core foundation built Mobile first capabilities focused on everyday banking New card management system In house loyalty and reward platform • First brand enabled (VMA) ME Bank core upgraded to v.18 of Temenos Phase 2 - Step change in customer experience • • • • Extension of cloud based core to multi-brand Digital home loan origination Mobile first capabilities enabled through open banking and intelligent data Expanded loyalty offering Second brand enabled (BOQ) ME Bank migration to v.18 completing, then migration to cloud v.20 beginning Phase 3 Customer Migration and Ecosystems Migration of all customers, all brands onto the new digital platform Retirement of legacy core banking systems • Further enhancements and scalability (all brands, all products) Operational excellence with next level automation • Strategic partnerships through chosen ecosystems Bank of Queensland Limited 2021 Full Year Results Presentation FUTURE RETAIL PLATFORM END STATE Virgin money me ALL RETAIL CUSTOMERS ON A SINGLE PLATFORM Scalable platform with step change in automation Fully digital & real time Cloud based core END STATE Cloud enabled & evergreen upgrade Mobile first & customer centric BOQ Multi-brand New enterprise data capability and open through APIs 13#14For personal use only ME BANK ACQUISITION STRATEGIC BENEFITS DELIVERING VALUE AND INTEGRATION AHEAD OF SCHEDULE BOQD GROUP Significantly enhanced scale and portfolio mix for profitable growth Strong complementary challenger brands with a shared customer centric culture • 580k customers added, bringing the total to 1.5m $25bn GLAS added, total BOQ GLAS now c.$75bn • Retail net profit contribution increases to c.55% Differentiated customer segments and geographies with minimal overlap BOQ's East Coast presence has been re-balanced High Net Promoter Scores (NPS) achieved across all brands Attractive financial outcomes • • • Due diligence assumptions validated Work underway to return ME Bank to growth, with application volumes up 36% in August and September compared to the FY21 average Synergies accelerated and expected to be delivered by end of FY231 Clear pathway to a cloud based common digital Retail bank technology platform Upgrade to Temenos v.18 completed, customer migration underway Plans being developed for final migration to common cloud platform Leveraged capital investment across combined business Bank of Queensland Limited 2021 Full Year Results Presentation (1) Synergies to be delivered by the end of FY23 on an annualised run-rate basis 14#15EXECUTING THE TRANSFORMATION ROADMAP Excluding ME Bank unless otherwise noted Purpose Led Culture Growth, margin and productivity Distinctive brands serving niche segments Key Metrics Employee engagement Strong Leadership Team Customer Numbers Jaws Home lending system multiples² Business lending system multiples² Margin Productivity benefit Consumer NPS3 Mortgage NPS³ Business NPS4 Time to 'yes' - proprietary5 Time to 'yes' - broker5 FY19 56% FY20 59% High level of Executive turnover Key Executive roles filled c.1.0m Negative jaws -6% 0.2x system 1.2x system 1.93% 5th 11th joint 4th 5 days 8 days c.900k Negative jaws -6% 0.9x system Positive to system 1.91% $30m 3rd For personal use only Digital Bank Delivery of core projects of the Future Strong Financial & Risk Position CET1 NSFR LCR BOQD GROUP FY21 64% Executive team in place and delivering c.1.5m¹ Positive jaws +2% 1.7 x system 0.8x system 1.95% $30m 3rd ✓ Branch bandwidth & telephony upgrade ✓ E Conveyancing (PEXA) ✓ Virgin Money credit card app ✓ Internet banking upgrade for BOQS ✓ Regulatory uplift 5th 3rd 1 day 3 days ✓ Upgraded BOQS mobile app Contact Centre telephony platform ✓ Treasury system upgrade ✓ Migration of data centres to cloud ✓ Customer engagement platform ✓ Risk & Regulatory program joint 4th 3rd 1 day 3 days ✓ Phase 1 of retail digital bank ✓ New credit cards management system Regulatory reporting program ✓ Lending system enhancements ✓ FX digital platform 9.04% 112% 145% 70% 9.78% 119% 164% 74% 9.80%¹ 122%¹ 149%¹ 75%¹ Deposit to loan ratio (1) Including ME Bank (2) Reflects the APRA definition of lending and will therefore not directly correlate to the balance sheet growth. Adjustments made to include BOQ Finance non ADI balances in overall growth result (3) RFI XPRT Report, August 2021, August 2020 and August 2019. Excludes ME Bank. Bank of Queensland Limited 2021 Full Year Results Presentation (4) DBM Atlas Report August 2021, August 2020 and August 2019. SME NPS refers to Any Financial Relationship (AFR) and businesses under $40m turnover (5) BOQ brand during August 2021. Time to conditional yes varies during the year based on volumes and customer mix. 15#16For personal use only BUILDING A SUSTAINABLE BUSINESS CLEAR FOCUS ON ENVIRONMENTAL, SOCIAL AND GOVERNANCE OUTCOMES FY21 OUTCOMES . Environmental • Carbon neutral certification achieved • Climate risk scenario analysis enhanced Social • Gender diversity focus - 39% of senior leadership positions held by women Employee engagement score increased to 64% Ongoing support of community partners and investment in local grassroots communities BOQD GROUP KEY FOCUS AREAS GOING FORWARD Environmental • Reducing emissions and targeting 100% renewable energy by 2025 Supporting customers transition to low carbon future Social Senior leadership target of 40% females, 40% male, and 20% any gender • Employee engagement target of 72% • Ongoing support of the community through partnerships and investment. Governance • All relevant Royal Commission recommendations implemented Supplier Code of Conduct introduced Bank of Queensland Limited 2021 Full Year Results Presentation Governance • Ongoing embedding of ESG risk management practices 16#17For personal use only FINANCIAL DETAIL, TRANSFORMATION & INTEGRATION EWEN STAFFORD CHIEF FINANCIAL OFFICER AND CHIEF OPERATING OFFICER BOQD GROUP#18For personal use only FINANCIAL PERFORMANCE¹ UNDERLYING PROFIT GROWTH OF 8% DRIVEN BY 2% JAWS IN THE HALF AND FOR FY21 BOQD GROUP $ million FY21 FY20 FY21 vs FY20 2H21 1H21 2H21 vs 1H21 BOQ + ME FY213 FY21 vs FY204 Net interest income 1,050 986 6% 538 512 5% 1,128 14% Non-interest income 2 125 128 (2%) 59 66 (11%) 130 2% Total income 1,175 1,114 5% 597 578 3% 1,258 13% Operating expenses 2 (633) (612) 3% (318) (315) 1% (684) 12% Underlying profit 542 502 8% 279 263 6% 574 14% Loan impairment expense 20 (175) Large 44 (24) Large 21 Large Cash profit before tax 562 327 72% 323 239 35% 595 82% Income tax expense (173) (102) 70% (99) (74) 34% (183) 79% Cash earnings after tax 389 225 73% 224 165 36% 412 83% Statutory net profit after tax 352 115 206% 198 154 29% 369 221% Cash basic earnings per share 5 ¾ NM 49.6c NM NM 35.5c ¾ NM 74.7c 25.1c Cash return on average equity 5(%) NM 5.4 NM NM 7.8 NM 8.2% +280bps Bank of Queensland Limited 2021 Full Year Results Presentation (1) Excluding ME Bank, unless otherwise noted (2) VMA costs have been restated from non-interest income and included in operating expenses (3) Including earnings from ME Bank for the period 1 July 2021 to 31 August 2021 (4) PCP does not include comparative earnings for ME Bank (5) Including ME Bank 18#19For personal use only NON CASH EARNINGS NON CASH EARNINGS IMPACTED BY ME BANK ACQUISITION $ million Cash earnings after tax Intangible asset review and restructure charges Employee pay and entitlement review ME Bank transaction costs ME Bank integration costs Other Non-Cash Items Total Non-Cash Items Statutory net profit after tax BOQD GROUP FY21 FY20 2H21 1H21 ME Bank¹ BOQ + ME² FY21 389 225 224 165 23 412 (80) (3) (3) (6) (8) (6) (6) (19) (16) (3) (19) (7) (7) (2) (9) (5) (22) (3) (2) (1) (6) (37) (110) (26) (11) (6) (43) 352 115 198 154 17 369 Bank of Queensland Limited 2021 Full Year Results Presentation (1) Earnings from ME Bank for the period 1 July 2021 to 31 August 2021 (2) Including earnings from ME Bank for the period 1 July 2021 to 31 August 2021 19#20For personal use only NET INTEREST MARGIN¹ GOOD NIM MANAGEMENT BALANCING RETURNS AND GROWTH BOQD GROUP SUMMARY Asset pricing impacts from front to back book drag are consistent with prior halves NET INTEREST MARGIN - FY20 TO FY21 0.14% (0.01%) 0.03% (0.07%) (0.05%) • • Reductions from fixed housing spreads and mix in FY21 Funding costs continued to benefit from reduced deposit rates, change in mix and wholesale funding costs Slowing reduction from the low cash rate environment on the capital and low cost deposit portfolio NET INTEREST MARGIN – 1H21 TO 2H21 - 1.95% (0.10%) -5bps housing FTBB² -1bps commercial FTBB -5bps-fixed housing spreads and mix +1bps repricing benefits 1H21 Asset pricing and mix Bank of Queensland Limited 2021 Full Year Results Presentation 1.91% 1.95% FY20 Asset pricing and mix Funding costs and mix Hedging costs Capital and low Liquidity & other BOQ excluding cost deposits ME Bank 0.13% 0.00% (0.02%) (0.01%) +6bps-term deposits +4bps-tran & savings +3bps wholesale Funding costs and mix 1.95% Hedging costs Capital and low cost deposits Liquidity & other BOQ excluding ME Bank 20 (1) Excluding ME Bank (2) FTBB = Front to Backbook#21For personal use only NON-INTEREST INCOME¹ STABILISING BANKING NON-INTEREST INCOME BUT IMPACTED BY TRADING AND LOWER INSURANCE INCOME BOQD GROUP • SUMMARY FY21 non-interest income declined by $3m: > Banking fees normalising following NON-INTEREST INCOME BREAKDOWN ($M)² the ongoing industry trends toward low and no fee products 144 5 128 125 11 5 > $5m increase in other income, 17 including a $3m one off benefit on the 11 cards portfolio 46 48 43 88 > $4m reduction in insurance income from the closure of St Andrews to new business in 1H20 828 82 69 69 > Trading income impacted by $4m due to lack of volatility and low rates Bank of Queensland Limited 2021 Full Year Results Presentation FY19 FY20 FY21 ■Banking Other Insurance Trading Income (1) Excluding ME Bank 21 (2) VMA third party costs have been restated from non-interest income and included in operating expenses#22For personal use only OPERATING EXPENSES¹ INVESTMENT IN STRATEGIC INITIATIVES AND COSTS TO SUPPORT GROWTH SUMMARY Expenses increased $21m or 3% from FY20 • Underlying expenses increased 1.5% Increased investment on strategic initiatives, including VMA and other technology and digital projects • $14m of costs to support business growth in operations, product and marketing Year 2 productivity benefits of $30m delivered, bringing the total to $60m Bank of Queensland Limited 2021 Full Year Results Presentation OPERATING EXPENSE BREAKDOWN ($M)² BOQD GROUP 612 633 11 6 7 14 5 9- 10 (30) 17 52 45 39 39 517 Underlying expenses +1.5% 525 FY203 VMA Digital Bank Projects Business volume growth Lower annual leave taken Inflation Other Productivity FY21 (1) Excluding ME Bank Underlying Expenses Amortisation Projects ■VMA Digital Bank (2) VMA third party costs have been restated from non-interest income and included in operating expenses 22 (3) FY20 includes a $4m reclassification from projects to underlying expenses for data centre costs which have now moved to BAU#23For personal use only CAPITAL INVESTMENT1 TRANSFORMATION INVESTMENT CONTINUES SUMMARY • • Major capital investment in 2H21 with projects moving from discovery to development $10m in cards management system has been partner funded Assets of the combined entity has an average useful life of 6.1yrs, with an average remaining life of 3.6yrs² Investment capex envelope for combined organisation expected to be c.$115m $120m in FY222 - Amortisation for combined organisation anticipated to increase in FY22 with further increase in FY23 and then plateau in FY242 BOQD GROUP CAPITAL INVESTMENT ($M) 113 100 95 10 48 66 60 FY21 $103m 52 35 FY19 37 FY20 FY21 1H 2H Partner Funded Capital Investment SOFTWARE INTANGIBLE ASSET BALANCES ($M) 10 103 (39) 290 216 95 121 FY20 FY21 Software Investment Partner Funded Capital Investment Amortisation 193 97 FY21 Assets under construction Software intangible assets balance Bank of Queensland Limited 2021 Full Year Results Presentation (1) Excluding ME Bank (2) Including ME Bank 23#24For personal use only PROVISIONS AND LOAN IMPAIRMENT EXPENSE¹ CONTINUE TO REVIEW ECONOMIC ASSUMPTIONS TO ENSURE PROVISIONS ARE PRUDENTLY MANAGED BOQD GROUP PROVISIONS ($M) -16% 369 374 313 LOAN IMPAIRMENT EXPENSE ($M) 147 235 275 271 206 150 26 822 28 126 24 21 28 (44) 21 (4) (65) 85 94 103 107 1H20 2H20 1H21 2H21 1H20 2H20 1H21 2H21 Specific Collective IMPAIRED ASSETS ($M)² 196 +8% Specific Collective LOAN IMPAIRMENT EXPENSE TO GLA (BPS) 209 195 194 38 28 39 32 62 -27bps 77 95 78 12 10 86 (17) 84 94 73 70 1H20 2H20 1H21 2H21 1H20 2H20 1H21 2H21 Housing & Consumer ■Commercial Lending Asset finance Loan Impairment to GLA Excluding material collective provisions(3) 1H20 2H20 8bps 10bps 1H21 2H21 10bps 12bps (1) Excluding ME Bank Bank of Queensland Limited 2021 Full Year Results Presentatio (2) BOQ Specialist Asset finance products have been reclassified from Commercial lending to Asset Finance for all periods presented (3) Loan impairment to GLA excludes material collective provisions adjustments, 1H20 $10m, 2H20 $123m and 2H21 -$75m 24#25For personal use only PORTFOLIO QUALITY¹ ARREARS TRENDS REMAIN BROADLY STABLE SUMMARY COMMERCIAL ARREARS (bps) BOQD GROUP • Low interest rate environment and increased household deposits supporting lower housing arrears 160 153 148 152 • Commercial arrears normalised to pre COVID-19 levels • Increase in asset finance arrears driven by the impacts of the extended lockdown in NSW and VIC 125 104 91 93 Feb-20 Aug-20 Feb-21 Aug-21 HOUSING ARREARS (bps) 99 110 ASSET FINANCE ARREARS (bps) 69 109 85 60 85 50 48 85 20 17 74 15 12 54 55 Feb-20 Aug-20 Feb-21 Aug-21 Feb-20 Aug-20 Bank of Queensland Limited 2021 Full Year Results Presentation (1) Excluding ME Bank. Arrears figures differ from those reported to APRA due to different definitions Feb-21 Aug-21 30DPD 90DPD 25#26For personal use only FUNDING & LIQUIDITY1 RESILIENT FUNDING AND LIQUIDITY PROFILE MAINTAINED SUMMARY . Deposit to loan ratio at 75% Customer deposit growth of $3.3bn, driven by an increase in transaction, savings and investment, and offset accounts BOQD GROUP FUNDING MIX ($BN) 55.2 50.3 50.8 11.8 12.0 11.3 5.4 5.9 4.8 • Reliance on term deposits continues to decline as we further rebalance our customer deposits mix 32.4 34.7 38.0 • Full drawdown of Term Funding Facility² • FY21 LCR of 149% and NSFR of 122%3 FY19 FY20 FY21 Customer Deposits Short Term Wholesale ■Long Term Wholesale CUSTOMER DEPOSITS ($BN) LONG TERM WHOLESALE FUNDING ($BN) 38.0 32.4 2.3 2.7 11.2 34.7 12.0 11.3 3.3 11.8 3:8 4.4 0.8 0.7 1.0 0.8 2.2 13.3 15.6 5.0 4.0 3.2 1.6 16.2 FY19 15.0 FY20 14.7 FY21 2.4 2.4 4.6 3.4 3.0 Term Deposits Savings & Investments Transaction Accounts Offsets FY19 FY20 FY21 DTL ratio 70% 74% Bank of Queensland Limited 2021 Full Year Results Presentation 75% ■Securitisation Covered Bonds Senior Unsecured TFF AT1 Notes/ Subordinated Debt (1) Excluding ME Bank (2) BOQ utilised its TFF allowance of c.$2.2bn, and ME Bank utilised their TFF allowance of c. $900m (3) LCR and NSFR include ME Bank 26#27CAPITAL STRONG CAPITAL POSITION ENABLING GROWTH AND TRANSFORMATION BOQD GROUP SUMMARY • Successfully completed $1.35bn capital raise to fund the acquisition of ME Bank² • 37bps of capital utilised in 2H21 to deliver above system asset growth, with 31bps of RWA growth and 6bps from increased loan origination costs • Benefit of 7bps from collective provision release • CET1 remains strong at 9.80%, and in FY22 expected to remain comfortably above the top end of the target range of 9 - 9.5%¹ CET11H21 TO 2H21 CET1 FY20 TO FY21 9.78% - 0.86% (0.40%) (0.09%) 0.07% (0.33%) (0.04%) (0.16%) 0.11% 9.80% FY20 FY21 cash NPAT RWA growth Loan costs Collective origincation provision release Dividend net Securitisation of DRP impact Net CAPEX Other items FY21 For personal use only 10.03% 0.49% (0.31%) (0.06%) 0.07% (0.22%) (0.02%) (0.12%) Underlying capital utilisation of -3bps (0.06%) 9.80% 1H21 2H21 Cash NPAT RWA growth Loan origination costs Collective provision release³ Dividend net of DRP Securitisation impact Net CAPEX Other items FY21 (1) BOQ intends to operate above the management target range of 9.0 - 9.5% in FY22 until the final impacts of APRA's changes to RWAS and capital calibration are understood. Refer to page 54 in the ME Bank acquisition investor presentation for further detail. (2) Proceeds from the capital raising were received in March 2021 and fully funded the capital impacts of the ME Bank acquisition Bank of Queensland Limited 2021 Full Year Results Presentation (3) Collective provision release refers to a $45m pre-tax adjustment due to improved economic conditions 27#28EXECUTING THE TRANSFORMATION ROADMAP KEY STRATEGIC INITIATIVES DELIVERED IN FY21 Digital Bank of the Future Online transaction, savings and credit card accounts developed and plans to scale to all brands Debit cardholders now have instant card issuance, digital wallet & self-service convenience. Upgraded internet and mobile banking for business customers FX digital platform and currency exchange For personal use only Distinctive brands serving niche segments Upgraded Broker portal and digital tools Evolution of owner manager model t BOQD GROUP Simple and intuitive Improved broker experience, mortgage hub service and efficiency uplift Process and product simplification, reducing business complexity • Streamlined complaints resolution Financial and Risk Position Operational risk tool • Regulatory & compliance programs Open Banking Program progressing Streamlined customer risk rating and transaction monitoring • Payroll system enhancements Purpose Led Culture . • Business Banker toolkit enhancement Capability programs to enhance leadership and coaching Underpinned by execution capability uplift program Bank of Queensland Limited 2021 Full Year Results Presentation 28#29For personal use only INTEGRATION PROGRAM DELIVERING STRATEGIC BENEFITS DELIVERING VALUE AND INTEGRATION AHEAD OF SCHEDULE BOQD GROUP Return ME Bank to growth • • Home Buying Transformation program commenced Product and pricing capability consolidated ⚫ ME Digital Bank Temenos v.18 upgrade completed, customer migration in progress Single Board and Leadership Team in place boo• Operating model refreshed • Implementation of combined organisational structure ahead of original plan Technology integration commenced • Collaboration tools in place for day 1 • Network integration program commenced Risk, compliance and remediation uplift • AML uplift and remediation program in place and progressing • Consolidation of fraud monitoring system commenced 5 ADI consolidation on track for early 20221 • Systems consolidation underway for Treasury, market risk and regulatory reporting Ongoing engagement with regulator Consolidation and simplification • • Phase 1 of policy harmonisation nearing completion Strategic sourcing consolidation commenced Bank of Queensland Limited 2021 Full Year Results Presentation (1) Subject to regulator approval 29#30For personal use only • • • SYNERGIES ACCELERATED SYNERGY BENEFITS AND INTEGRATION COSTS CONFIRMED AND ACCELERATING BOQD GROUP SUMMARY Synergy cost commitment accelerated and additional synergies identified FY22 in year P&L synergies expected to be $30 - $34m EXPENSE SYNERGY PROFILE ACCELERATED FY22 FY23 FY24 Pre-tax cost synergy benefits of $70 - $80m annualised run rate expected by Synergies Annualised run rate $38 - $42m $70 - $80m $80m+ Delivered percentage¹ C.50% -56% 100% 100%+ the end of FY23, with further upside in FY24 from core platform consolidation Other synergy sources identified and under review: Capex benefits of c.$15m expected from consolidated investment roadmap Further NIM benefits from wholesale and retail deposits Non-interest income benefits PHASING OF INTEGRATION COSTS OF $130 - $140M EXPENSE SOURCE OF SYNERGIES FY21 FY22 FY23 FY24 c.$70 $80m c. $30 - $40m c.$10m Integration costs $13m FY22 spend primarily relates to²: Operating model changes Technology spend on network integration, ADI handback requirements including treasury system, regulatory reporting and payroll integration Risk, compliance and remediation programs Integration program management Bank of Queensland Limited 2021 Full Year Results Presentation ■ Operating Model ■ Project Propex ■ Supply Chain ■ Other (1) Based on $75m mid-point of synergies range (2) Integration costs will be taken from non-cash earnings. 30#31For personal use only FY21 BOQ GROUP KEY METRICS & PRO FORMA¹ BOQD GROUP BOQ excluding ME Bank2 (Aug 21 YE) me ME Bank3 (Aug 21 YE) BOQ Group Pro Forma BOQ Gross Loans and Advances ($bn) 50.6 25.2 75.7 Total Assets ($bn) 62.4 29.0 91.4 Balance Sheet Total Interest Earning Assets ($bn) 56.4 28.8 85.2 Risk weighted assets ($bn) 33.8 10.4 44.2 Customer Deposits ($bn) 38.0 18.4 56.4 Total Revenue ($m) 1,168 505 1,673 Total Expenses ($m) (626) (307) (933) Income Statement Underlying Profit ($m) 542 198 740 Cash NPAT ($m)4 389 143 532 Net Interest Margin (%) Cost to Income (%) Pro Forma Key Metrics Total provisions and GRCL / GLA CET1 (%) Customers (#) c. 900k 1.95 1.70 1.86 53.6 60.8 55.8 76bps 38bps 63bps 9.80 c.1.5m c.600k (1) Pro formas have been prepared to align ME Bank to BOQ's August year end and to align ME Bank to BOQ's presentation of NII, Non-interest income and operating expenses (2) BOQ result has been adjusted as follows: VMA third party costs have been restated from non-interest income and included in operating expenses per ASX announcement on 30 September 2021 St Andrew's income as disclosed in note 2.4 and operating expenses and non interest income of $7 million in FY21 have been removed to reflect the planned divestment in 1H22 (3) Includes the impact of fair value adjustments on the balance sheet and amortisation of fair value adjustments on acquisition (4) ME Bank proforma does not include distributions on AT1 instruments, which are taken as an adjustment for the purposes of calculating earnings per share Bank of Queensland Limited 2021 Full Year Results Presentation (5) Provisions and GRCL for ME Bank have been grossed up to exclude the impact of the fair value adjustments on acquisition of ME Bank 31#32For personal use only SUMMARY & OUTLOOK BOQD GROUP GEORGE FRAZIS MANAGING DIRECTOR AND CEO#33For personal use only FY21 SUMMARY BOQD GROUP 1. Supporting our customers and people through ongoing challenging times 2. Delivering quality sustainable profitable growth 3. Executing on our digital transformation 4. Successfully completed acquisition of ME Bank and expected divestment of St Andrew's in 1H22 5. Focus on strength with strong balance sheet and capital, with sound asset quality and conservative provision overlays in place Bank of Queensland Limited 2021 Full Year Results Presentation 33#34For personal use only FY22 OUTLOOK1 BOQD GROUP 1. Cautiously optimistic, despite the uncertain environment, Australia remains well placed for economic recovery 2. Focus remains on achieving quality sustainable profitable growth and delivering positive jaws 3. Expecting at least 2% jaws 4. 5 • Above system growth in BOQ and VMA housing to continue, return ME to around system growth by year end, growing around system in our niche business banking segments NIM decline of c.5 - 7bps Broadly flat expenses 3% underlying expense increase to support business Offset by accelerated year 1 synergies realised Capital investment spend of c.$115 - $120m including ME Bank, with integration costs of $70 - $80m 5. Maintaining a prudent approach to provisioning 6. CET1 to remain comfortably above 9.5%² 7. Dividend payout ratio target range of 60 - 75% of cash earnings³ (1) FY22 outlook is based on FY21 pro formas and subject to no material change in market conditions (2) BOQ intends to operate above the management target range of 9.0 - 9.5% in FY22 until the final impacts of APRA's changes to RWAs and capital calibration are understood. Refer to page 54 in the ME Bank acquisition investor presentation for further detail. (3) The amount of any dividend paid will be at the discretion of the Board and will depend on several factors, including (a) the recognition of profits and availability of cash for distributions; (b) the anticipated future earnings of the Company; or (c) when the forecast timeframe for capital demands of the business allows for a prudent distribution to Shareholders. Bank of Queensland Limited 2021 Full Year Results Presentation 34#35For personal use only ABOUT BOQ BOQD GROUP#36For personal use only HISTORY OF BOQ BOQ HAS BEEN SERVING CUSTOMERS FOR 147 YEARS with distinctive brands, highly specialised niches and Owner Managed branches Evolution of BOQ 160 Bank of Qu CENTENNensland BOQ FINANCE 2012 1971 1874 1974 2003 BOQ ASX listed BOQ BUSINESS' Virgin money me 2014 2013 2021 BOQ SPECIALIST BOQ has successfully grown organically and added differentiated capability in niche segments through "bolt on" acquisitions, providing a strong platform for differentiated growth Bank of Queensland Limited 2021 Full Year Results Presentation (1) BOQ Finance and BOQ Commercial consolidated to create BOQ Business 36 BOQD GROUP#37For personal use only BOQ UNIQUE BRANDS IN NICHE SEGMENTS SERVING CUSTOMERS FOR 147 YEARS OUR DIFFERENTIATORS > Unique brands with proud history Deeply anchored in local communities > Highly specialised bankers and credit officers, within niche industry segments Building an innovative digital offering and loyalty OUR DISTINCTIVE BRANDS Retail Banking Human, empathetic relationship-led BOQ banking Business Banking Virgin The digital bank money of bigger me The bank helping possibilities all Australians get ahead BOQ BUSINESS BOQ FINANCE BOQ SPECIALIST Specialised banking solutions that meet core business and personal needs KEY STATISTICS FOR FY21 c. 570k BOQ c. 1.5m Customers c. 195k VMA c. 580k ME BOQD GROUP c. 15k BOQB c. 35k Specialist c. 90k Finance 163 Branches1 >3.5k Employees >800 OMB Employees $132b Footings² 75% Deposit-to- Loan Ratio 3.00%³ Market share - Housing 1.62%3 Market share - Business (1) Total branches includes transaction and service centres (2) Footings means gross loans and advances plus customer deposits Bank of Queensland Limited 2021 Full Year Results Presentation (3) Internal BOQ Analysis and APRA monthly authorised deposit-taking institution statistics excluding International banks, August 2021 37#38For personal use only EXPERIENCED LEADERSHIP TEAM BOQD GROUP • GEORGE FRAZIS Managing Director and Chief Executive Officer Joined BOQ in September 2019 • More than 26 years' of experience Previously CEO Westpac Group's Consumer Bank, CEO St. George, CEO Westpac New Zealand Limited, CFO Institutional Bank, CBA, NAB Business and Private Bank Started in the RAAF as an engineer then a partner at BCG • EWEN STAFFORD Chief Financial Officer and Chief Operating Officer Joined BOQ in November 2019 More than 30 years' of experience across financial services, telecommunications, eCommerce and logistics, commercial property and professional services KPMG, MLC, NAB, Australia Post, Telstra, Deloitte DEB ECKERSLEY Group Executive People and Culture Joined BOQ as Group Executive, P&C in September 2018 More than 20 years' experience consulting to many of Australia's leading organisations Previously Managing Partner at PwC, leading the Human Capital function CRAIG RYMAN Chief Information Officer • NICHOLAS ALLTON Group General Counsel and Company Secretary Joined BOQ in February 2021 More than 25 years experience in Financial Services in Australia and the UK, most recently at MLC and Macquarie Joined BOQ in July 2020 More than 20 years' experience in financial services, leading technology transformation programs. Previously CIO and COO at AMP Limited . MARTINE JAGER Group Executive Retail & CEO ME Bank Joined BOQ in April 2021 Previously held number of executive roles including CEO of RAMS, Chief Digital and Marketing Officer for Westpac Group and General Manager third party Mortgage Broking at St George CHRIS SCREEN Group Executive BOQ Business • Joined BOQ in November 2019 . • Has over 25 years experience in financial services Previously held a number of senior business banking, retail banking and third party distribution roles at Westpac, St George and NAB DANIELLE KEIGHERY Chief Customer Officer Joined BOQ in January 2021 Previously, Chief Experience Officer at Virgin Australia Extensive Corporate Affairs, Brand, and Marketing experience ADAM MCANALEN Chief Risk Officer (outgoing, moving to a new role) Appointed to CRO of BOQ in June 2019 • Has held a number of senior leadership roles across the Business and Retail Banking, Finance, Operations and Risk divisions of BOQ After transition, moving to a new role DAVID WATTS Chief Risk Officer (commencing early 2022) Due to join BOQ in early 2022 Has over 25 years of senior executive experience in financial services Previously held CRO roles at several leading financial institutions including IAG, NAB and Westpac Bank of Queensland Limited 2021 Full Year Results Presentation 38#39For personal use only DISTRIBUTION FOOTPRINT 11 6 1073 601 1469 3 1 25 13 36 25 66 1670 1141 229 2172 7 7 550 267 7 18 2501 1810 2 802 2 62 62 77 Bank of Queensland Limited 2021 Full Year Results Presentation 10 109 3 BOQD GROUP SUMMARY FY21 branch numbers at 163 (incl. transaction centres) • The franchise network remains a key differentiator for BOQ and is pivotal to the Bank's deposit raising capabilities • In FY21 we expanded strategic 3rd party distribution partnerships with quality aggregators . Continued to build our broker presence with 39% of housing settlements (excluding ME) originated out of VMA and BOQ accredited brokers AS AT 31 AUGUST 2021 4532 12 53 CORPORATE BRANCHES سلام 2231 1839 4154 103 OWNER MANAGED BRANCHES 8112 BROKERS ACCREDITED WITH BOQ 33 13 5748 BROKERS ACCREDITED WITH VMA 13,274 BROKERS ACCREDITED WITH ME 40 ME BANK MOBILE & DIRECT BANKERS 7 TRANSACTION CENTRES 39#40For personal use only DISTRIBUTION FOOTPRINT MOVEMENTS BOQD GROUP Aug-21 Corporate branches QLD NSW / ACT VIC WA NT TAS SA Total 25 Owner managed branches Transaction centres 66 7 18 10 11 9 6 1 12 - 53 1 103 7 - - - - 7 98 25 19 17 1 2 1 163 Aug-20 Corporate branches Transaction centres QLD NSW/ACT VIC WA NT TAS SA Total 33 9 9 12 Owner managed branches 58 18 10 6 12 63 95 7 98 - - - - 7 27 19 18 1 2 165 CORPORATE, OWNER MANAGED BRANCHES & TRANSACTION CENTRES FY21 Actual YTD Summary of changes Corporate closure OMB closure OMB to corporate Corporate to OMB OMB to OMB sale New branch opening Total changes Bank of Queensland Limited 2021 Full Year Results Presentation Gross 3 1 10 32423 Net Branch Movement (3) (1) 22 (2) 40#41For personal use only DIVISIONAL RESULTS BOQD GROUP#42For personal use only DIVISIONAL PERFORMANCE1 STRONG PERFORMANCE ACROSS RETAIL & BOQ BUSINESS BOQD GROUP BOQ Virgin money BOQ BUSINESS BOQ SPECIALIST BOQ FINANCE RETAIL BUSINESS $ million FY21 FY20 FY21 vs FY20 FY21 FY20 FY21 vs FY20 Net interest income 492 437 13% 555 543 2% Non-interest income 69 74 (7%) ▼ 48 40 20% Total income 561 511 10% 603 583 3% Operating expenses (356) (335) 6% (262) (258) 2% Underlying profit 205 176 16% 341 325 5% Loan impairment expense 20 (56) Large (119) Large ▼ Cash profit before tax 225 120 88% 341 206 66% Income tax expense (70) (37) 89% (106) (64) 66% Cash earnings after tax 155 83 87% 235 142 65% Bank of Queensland Limited 2021 Full Year Results Presentation (1) Excluding ME Bank 42#43For personal use only RETAIL BANKING OVERVIEW¹ IMPROVED PERFORMANCE FOR BOQ BLUE AND CONTINUED MOMENTUM FOR VMA SUMMARY • The housing momentum generated at the end of FY20 has translated into positive lending growth across VMA and BOQ Retail Successful turnaround in the BOQ Blue brand Second phase of VMA digital bank incorporating home loans and term deposits and BOQ brand digital bank capabilities well progressed ME BANK - STRATEGICALLY AND FINANCIALLY COMPELLING $25bn GLA $18bn Deposits c.580k Customers ✓ Enhanced scale ✓ Broadly doubling the retail bank ✓ Providing geographic diversification Common cloud based technology platform ✓ Upgrade to v.18 of Temenos completed, customer migration commenced BOQD GROUP IMPROVED HOME LENDING GROWTH ($M)¹ 1,684 581 795 46 (50) 459 1,103 489 225 336 (443) (275) 1H20 2H20 1H21 2H21 Net Growth VMA BOQ Retail SOLID DEPOSIT FUNDING ($BN)² +7% 18.6 17.2 17.4 15.8 2.2 1.8 2.0 Attractive financial 1:8 2.0 2.2 2.5 outcomes 6.8 7.8 8.4 9.2 5.7 ✓ Due diligence assumptions 5.6 validated ✓ Synergies accelerated and expected to be delivered by end FY233 1H20 2H20 4.8 1H21 4.7 2H21 ■Term Deposits Savings & Investments Transaction Accounts ■ Offsets (1) Excluding ME Bank. BOQ Retail Bank home lending growth includes VMA plus BOQ Retail. Home lending growth includes a reclassification relating to a transfer of loans from BOQ Business Banking to Retail Banking reflecting customer segmentation changes. Prior periods have been restated. Bank of Queensland Limited 2021 Full Year Results Presentation (2) Excluding ME Bank (3) By the end of FY23 on an annualised run-rate basis 43#44BUSINESS BANKING OVERVIEW NICHE SEGMENT STRATEGY DELIVERING BALANCED GROWTH DESPITE CHALLENGING MARKET CONDITIONS BOQD GROUP SUMMARY Continued support to customers through the impacts of COVID-19 and the challenging economic climate • Continued focus on niche segment strategy with growth delivered in FY21 Strong deposit growth of $1.1 billion or 11% over FY21 largely in the transaction and savings account products LENDING GROWTH - BUSINESS BANK AND BOQF ($M) 237 249 BOQ BUSINESS BOQ FINANCE 273 8 FY20 FY21 FY20 FY21 Commercial BOQF Asset Finance For personal use only STRONG GROWTH IN DEPOSITS ($BN) LENDING GROWTH - BOQ SPECIALIST ($M) +5% -5% 10.8 10.3 9.7 8.5 1.1 1.1 1.0 1.6 1.9 1.9 4.9 5.6 6.0 6.4 592 7 106 479 BOQ SPECIALIST 563 151 487 1.5 1H20 1.5 1.3 1.4 (75) 2H20 1H21 2H21 FY20 ■Term Deposits Savings & Investments Transaction Accounts Offsets Commercial FY21 Housing & Consumer Asset Finance Bank of Queensland Limited 2021 Full Year Results Presentation 44#45For personal use only ME BANK BOQD GROUP#46For personal use only ME BANK FINANCIAL PERFORMANCE FINANCIAL RESULT IN LINE WITH DUE DILIGENCE ASSUMPTIONS BOQD GROUP SUMMARY Cash NPAT contribution of $23m for the two months post acquisition Financial performance in line with due diligence assumptions ⚫ BOQ Group NIM for the year including 2 months of ME Bank performance was 1.92% • Expenses broadly consistent with historical performance and integration provides opportunity for CTI improvement • Home Buying Transformation program commenced to drive uplift in GLA volumes going forward FY21 FINANCIAL IMPACT FY21 Financial Performance ME Bank Jul to Aug 21 $m BOQ FY21 excluding ME Bank BOQ FY21 including ME Bank $m $m 78 1,050 1,128 Net interest income Non-interest income 5 125 130 Total income 83 83 1,175 1,258 Operating expenses (51) (633) (684) Underlying profit 32 542 574 Loan impairment expense 1 20 20 21 Cash Net Profit Before Tax 33 562 595 Cash Net Profit After Tax 23 389 412 Statutory net profit after 17 tax 352 369 Net interest margin (%)¹ Cost to Income Ratio (%) 1.71% 1.95% 1.92% 61.4% 53.9% 54.4% Bank of Queensland Limited 2021 Full Year Results Presentation (1) ME Bank NIM includes a $5m effective interest rate adjustment following a fair value adjustment to the loan portfolio on acquisition 46#47For personal use only ME BANK PERFORMANCE FINANCIAL RESULT IN LINE WITH DUE DILIGENCE ASSUMPTIONS BOQD GROUP SUMMARY • Net interest income growth of 4% despite declining GLAS of 5% driven by NIM improvement On a pro forma basis ME Bank's NIM has improved from 1.59% in FY20 to 1.70% in FY21 • Expenses increased by 8%, including an $8m uplift in amortisation Loan impairment expenses benefited from a release of collective provision from a reduction in GLA balances and improvements in arrears ME BANK PRO FORMA1 ME Bank - FY21 Adjusted² FY20 v FY21 $m $m 489 470 4% ME Bank Financial Performance Net interest income ME Bank - FY20 Adjusted $m Non-interest income 16 16 Total income 505 486 4% Operating expenses (307) (283) 8% Underlying profit Loan impairment expense 6 198 203 (2%) (60) Large Bank of Queensland Limited 2021 Full Year Results Presentation adjustment to the loan portfolio on acquisition of ME Bank Cash Net Profit Before Tax 207 143 45% Cash Net Profit After Tax 143 101 42% Statutory net profit after tax 111 87 28% Net interest margin (%)¹ Cost to Income Ratio (%) 1.70% 1.59% 11bps 60.8% 58.2% 260bps (1) ME Bank results have been adjusted to reflect BOQ's reporting periods (2) Includes the amortisation of fair value adjustments on acquisition including an effective interest adjustment following a fair value 47#48For personal use only ME BANK LENDING AND DEPOSIT GROWTH1 FINANCIAL RESULT IN LINE WITH DUE DILIGENCE ASSUMPTIONS SUMMARY Housing loans continued to decline in line with recent historical trends Deposit growth of $2.4bn in FY21 has increased the deposit to loan ratio to 73% • Leveraging the BOQ Home Buying Transformation program to return ME Bank to growth • Early green shoots with application volumes increasing by 36% in August and September compared to the FY21 average CUSTOMER DEPOSITS ($BN) 16.0 1.2 0.8 6.5 7.5 2H20 GROSS LOANS AND ADVANCES GROWTH ($M) 439 BOQD GROUP (494) (512) 441 (897) (2) (457) (483) (872) (55) (11) (25) 1H20 2H20 1H21 2H21 Housing Other GROSS LOANS AND ADVANCES BALANCES ($BN) 18.4 16.4 1.5 1.3 27.1 0.3 1.0 26.6 0.2 26.1 25.2 0.2 0.8 0.2 8.6 8.0 26.8 26.4 25.9 25.0 6.3 1H21 7.3 2H21 Term Deposits Savings & Investments Transaction Accounts Offsets 1H20 2H20 1H21 2H21 Housing Other Bank of Queensland Limited 2021 Full Year Results Presentation (1) ME Bank results have been adjusted to reflect BOQ's reporting periods 48#49For personal use only PORTFOLIO QUALITY BOQD GROUP#50HOUSING PORTFOLIO For personal use only Portfolio - Total Spot Balance ($m) Variable Rate Owner Occupied Investor Line of Credit Proprietary Broker UL Interest Only Principal & Interest Bank of Queensland Limited 2021 Full Year Results Presentation (1) Excluding ME Bank BOQD GROUP FY21 excluding ME Bank FY21 including ME Bank FY201 34,101 59,053 31,155 68% 63% 78% 63% 69% 61% 37% 31% 39% 3% 2% 4% 74% 61% 79% 26% 39% 21% 16% 14% 19% 84% 86% 81% 50#51For personal use only HOUSING LOAN PORTFOLIO HOUSING PORTFOLIO BY STATE Excluding ME Bank Excluding ME Bank Including ME Bank 16% 4% 10% 27% 11% 6% 22% 29% 44% 31% BOQD GROUP HOUSING PORTFOLIO BY LVR HOUSING PORTFOLIO BY CHANNEL Excluding ME Bank 5% 17% 29% 13% 13% Including ME Bank 31% 18% 5% 16% 30% 31% 18% 12% 18% 44% Including ME Bank 7% 26% 25% 10% 17% 7% 7% QLD NSW & ACT VIC WA Other Up to and including 60% >60% to 70% >80% to 90% Greater than 90% >70% to 80% OMB BOQS Corporate IME Bank Proprietary Bank of Queensland Limited 2021 Full Year Results Presentation (1) Housing portfolio originated by BOQ brand broker channel VMA Broker¹ ME Bank Broker 51#52For personal use only ASSET FINANCE PORTFOLIO SUMMARY • Portfolio is well diversified geographically • Broad industry spread reducing concentration • Focused on supporting tools of trade ASSET FINANCE BY INDUSTRY 20% 18% ASSET FINANCE BY STATE 9% 6% 31% 8% ■ QLD ■NSW ■ VIC ■ WA 20% NZ 26% ■ Other ■Construction Transport ■ Manufacturing ■ Agriculture 12% ■Retail & Whs Trade ASSET FINANCE BY CHANNEL 14% 2% 3% 9% 16% ■Rental, Hiring 7% 3% ■ Professional 6% 11% 7% ■ Health Care ■ Other Bank of Queensland Limited 2021 Full Year Results Presentation 17% BOQD GROUP 55% ■ Equipment Finance ■ Structured Finance ■ Dealer Finance ■ Cashflow Finance ■ Vendor Finance BOQS 52#53For personal use only COMMERCIAL PORTFOLIO SUMMARY • Commercial portfolio well diversified geographically Focused on specialist industry segments COMMERCIAL PORTFOLIO BY STATE 6% 3% 16% COMMERCIAL PORTFOLIO BY INDUSTRY 6% 16% 6% 7% 9% 24% ■ Property 33% ■ Health Care ■Construction ■ Professional ■ Accommodation Agriculture ■ Other Bank of Queensland Limited 2021 Full Year Results Presentation 34% ■ QLD NSW & ACT 40% VIC ■ WA Other COMMERCIAL PORTFOLIO BY CHANNEL BOQD GROUP 24% 3% 15% · 58% ■ Business Banking ■ BOQS ■ OMB ■ Other 53#54For personal use only INDUSTRY AND GEOGRAPHIC SPLIT OVER TIME¹ HOUSING LOANS - GEOGRAPHIC SPLIT OVER TIME FY21 Balance Outstanding (%) FY17 Balance Outstanding (%) 31% 50% 29% QLD NSW & ACT VIC WA Other ASSET FINANCE - INDUSTRY SEGMENTS OVER TIME FY21 Balance Outstanding (%) FY17 Balance Outstanding (%) Construction 18% 15% 16% 21% 22% 11% 6% 21% 14% 12% 3% 12% 7% 11% 7% 29% 13% 8% 8% 8% 27% . Retail Trade ■Other Health Care Transport ■Manufacturing ■Agriculture COMMERCIAL - INDUSTRY SEGMENTS OVER TIME FY21 Balance Outstanding (%) 33% 24% 9% 7% 6% 22% FY17 Balance Outstanding (%) 29% 22% 8% 11% 7% 23% Property ■ Health Care Construction Professional ■Accomodation Other TOTAL LENDING2 - GEOGRAPHIC SPLIT OVER TIME FY21 Balance Outstanding (%) 33% 27% 21% 10% 9% FY17 Balance Outstanding (%) 38% ■QLD ■NSW VIC 27% ■WA 19% 8% 8% ■ Other Bank of Queensland Limited 2021 Full Year Results Presentation (1) Including ME Bank (2) Excluding Consumer BOQD GROUP SUMMARY • Enhanced geographic diversification, Queensland. housing portfolio reducing over 4 years from 50% in FY17 to 31% in FY21 The addition of ME Bank creates a geographically diverse housing portfolio Asset Finance and Commercial Lending portfolios remain diversified across a broad range of industries 54#55For personal use only SUPPORTING OUR CUSTOMERS THROUGH COVID-19 BOQD GROUP SUMMARY · Assistance to customers affected by extended lock down remains considerably lower compared to the height of COVID-19 Bank of Queensland Limited 2021 Full Year Results Presentation DEFERRALS ($BN)1 (1) Excluding ME Bank. Data as at 30 September 2021 (2) From 1 July 2021 18% 15% 16% 7.6 12% 6.2 2.8 HL deferral balance as % of retail lending SME deferral balance as % of commercial lending ME Bank's housing loan deferrals equate to $0.1bn or 0.43% of ME housing loans 2.5 0.6% 0.5% 0.3 4.8 3.7 30-Apr-20 31-Aug-20 0.2 0.1 New Deferrals as at Sep-21² HL deferral balances ■SME deferral balances 55#56For personal use only CAPITAL, FUNDING & LIQUIDITY BOQD GROUP#57For personal use only REPLICATING PORTFOLIO¹ SUMMARY ⚫ Slowing reduction from the low cash rate environment on the capital and low cost deposit portfolio Bank of Queensland Limited 2021 Full Year Results Presentation REPLICATING PORTFOLIO AND EQUITY HEDGE (%) 6% 4% 2% 3M BBSW Replicating Portfolio Return RBA Official Cash Rate BOQD GROUP 0% Aug-14 Feb-15 Aug-15 Feb-16 Aug-16 Feb-17 Aug-17 Feb-18 Aug-18 Feb-19 Aug-19 Feb-20 Aug-20 Feb-21 Aug-21 Aug-21 Balance $bn 2H21 Avg Return Exit Return Rate Avg term Equity 2.7 0.80% Deposit 2.5 0.84% 0.71% 0.68% 3 years 3 years Uninvested capital and low cost deposits 2.2 0.03% 0.03% 3 months (1) Relates to BOQ only 57#58For personal use only HEDGING COSTS - BASIS RISK SUMMARY The impacts of hedging costs had a flat NIM impact in 2H21 LONG TERM BASIS RISK AVG - 23BPS 0.6% Bank of Queensland Limited 2021 Full Year Results Presentation 0.4% 0.2% 0.0% -0.2% Aug-11 Aug-12 Aug-13 тл WV Aug-14 Aug-15 Aug-16 Aug-17 Aug-18 Aug-19 Aug-20 Aug-21 58 BOQD GROUP#59For personal use only FUNDING BOQD GROUP SUMMARY Loan growth funded through stable funding sources, including customer deposits, long term wholesale and the TFF Ongoing growth in deposits resulted in the increase of the deposit to loan ratio to 75% ME Bank customer deposits contributed $18.4bn to Group deposits, with no change to the combined deposit to loan ratio of 75% USES & SOURCES OF FUNDING - FY21 ($BN)1 REQUIRED FUNDING FUNDING SOURCES DEPOSIT TO LOAN RATIO 75% 75% 74% 70% 0.1 (3.6) 3.3 (0.7) 0.5 (2.8) 3.3 Lending Assets Liquid Assets and other Asset Long Term Wholesale Growth Maturities Long Term Wholesale Funding Issuance And Short Term Wholesale Funding Customer Deposits Other FY19 FY20 FY21 - excluding FY21 - including ME Bank ME Bank TFF Bank of Queensland Limited 2021 Full Year Results Presentation (1) Exclusive of ME Bank 59#60For personal use only LIQUIDITY 2.8% 0.4% (4.9%) 4.6% SUMMARY Strong liquidity with LCR at 149% and NSFR at 122%, well above regulatory targets at the end of 2H21 • Customer deposits grew by $3.3 billion or 9% on FY20, consistent with the Bank's strategy to increase stable sources of funding while also reflecting ongoing high levels of liquidity in the market • Well positioned to support future growth NSFR MOVEMENT 117.9% 1.0% Feb 2021 Capital Customer deposits Bank of Queensland Limited 2021 Full Year Results Presentation BOQD GROUP (0.6%) 122.2% 3.7% (2.7%) Wholesale Liquid assets Residential Other loans Other assets funding & other liabilities mortgages ≤ 35% LCR MOVEMENT 37.9% (13.3%) (14.4%) (14.8%) (3.6%) 182.4% (34.5%) ME Bank Aug 2021 9.5% 149.2% Feb 2021 HQLA1 Internal RMBS Other ALA Customer deposits Wholesale funding Other cash outflows ME Bank Aug 2021 60#61For personal use only CREDIT RATING BOQD GROUP The Bank monitors rating agency developments closely and is rated by Standard & Poor's (S&P), Moody's Investor Service and Fitch Ratings. BOQ's current debt ratings are shown below. Rating Agency S&P Fitch Moody's Bank of Queensland Limited 2021 Full Year Results Presentation Short Term Long Term Outlook A2 BBB+ Positive F2 A- Stable P2 A3 Stable 61#62For personal use only ECONOMIC ASSUMPTIONS BOQD GROUP#63For personal use only MACRO ECONOMIC ENVIRONMENT ECONOMIC ENVIRONMENT TO IMPROVE BUT UNCERTAINTY TO REMAIN MACRO ECONOMIC The economy should rebound strongly from the lockdowns. The likelihood of ongoing COVID cases creates uncertainty about the outlook Some restrictions (notably on international people movement) are likely to be in place for at least the next year Fiscal and monetary policy response continues to underpin the recovery BOQD GROUP CONSUMER Consumer confidence has taken a hit from the lockdowns although households remain upbeat about the medium term Demand for workers remains solid. Any rise in the unemployment rate from the recent lockdowns is likely to be limited Very low interest rates and a recovering economy has resulted in strong house price growth The large build-up of household savings will play an important role in the economic outlook Bank of Queensland Limited 2021 Full Year Results Presentation • BUSINESS . • Business short-term confidence in the economy has taken a knock although investment and hiring intentions remain reasonable Conditions are mixed across sectors and regions The COVID-19 restrictions are proving a challenge for some SME's Agribusiness continues to do well Expectations of reasonable economic growth, low interest rates and government incentives have underpinned a rise in business lending 63#64For personal use only DISCLAIMER GROUP BOQD#65For personal use only DISCLAIMER BOQD GROUP IMPORTANT INFORMATION AND DISCLAIMER This is a presentation of general background information about Bank of Queensland Limited and its consolidated entities (BOQ's) activities at the date of this document. It is in summary form, does not purport to be complete and should be read in conjunction with BOQ's other periodic and continuous disclosure announcements, including the 2021 Full Year Results Announcement (available at www.boq.com.au). All figures are presented on a cash earnings basis unless otherwise stated. No representations are made as to the accuracy, completeness or reliability of the information contained in this presentation. The information contained in this presentation may include information derived from publicly available sources that has not been independently verified. This presentation is not financial product advice and should not be relied upon for investment purposes. It does not take into account the investment objectives, financial situation or needs of any particular investor. Investors should consider these factors, and consult with their own legal, tax, business and/or financial advisors in connection with any investment decision. Nothing in this presentation should be construed as either an offer to sell or a solicitation of an offer to buy or sell BOQ securities in any jurisdiction. This presentation may contain forward-looking statements about BOQ's business and operations, strategy, market conditions, results of operations and financial condition, capital adequacy, specific provisions, potential synergies and risk management practices. These forward looking statements may be identified by the use of forward looking terminology, including the terms "believe", "estimate", "plan", "target", "project", "anticipate", "expect", "intend", "likely", "may", "will", "could" or "should" or, in each case, their negative or other variations or other similar expressions, or by discussions of strategy, plans, objectives, targets, goals, future events or intentions. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. There are a number of factors (which may involve known and unknown risks and uncertainties, many of which are outside the control of BOQ) that could cause actual results to differ materially from those expressed, or implied by, any forward-looking statements. These include (without limitation) a significant change in BOQ's financial performance or operating environment, material changes to the law or applicable regulation, risks and uncertainties associated with the COVID-19 pandemic, the Australian and global economic / political environment and capital market conditions. Readers should not place undue reliance on any forward-looking statements. To the maximum extent permitted by law, responsibility for the accuracy or completeness of any forward-looking statements, whether as a result of new information, future events or results or otherwise, is disclaimed. BOQ does not undertake to update any forward-looking statements contained in this document, subject to disclosure requirements applicable to it. Bank of Queensland Limited 2021 Full Year Results Presentation 65#66For personal use only ABBREVIATIONS 1H: First half of financial year 2H: Second half of financial year 30DPD: 30 days past due 90DPD: 90 days past due AASB: Australian Accounting Standards Board ADI: Authorised Deposit-taking Institution APRA: Australian Prudential Regulation Authority ASIC: Australian Securities & Investments Commission AUC: Assets Under Construction Avg: Average BBSW: Bank Bill Swap Rate BDD: Bad & Doubtful Debt Expense BOQS: Bank of Queensland Specialist bps: basis points CAGR: Compound annual growth rate CCI: Consumer Credit Insurance CET1: Common Equity Tier 1 CP: Collective Provision CTI: Cost-to-income ratio DPD: Days past due EPS: Earnings per share FTE: Full Time Equivalent FY: Financial year GDP: Gross Domestic Product GLA: Gross Loans & Advances GRCL: General Reserve for Credit Losses LCD: Low cost deposit LCR: Liquidity Coverage Ratio LGD: Loss Given Default LIE: Loan Impairment Expense LOC: Line of Credit LVR: Loan to valuation ratio MFI: Main Financial Institution NIM: Net Interest Margin NM: Not meaningful NPAT: Net Profit After Tax NSFR: Net Stable Funding Ratio OMB: Owner Managed Branch PCP: Prior corresponding period PD: Probability of Default RBA: Reserve Bank of Australia ROE: Return on equity ROTE: Return on tangible equity RWA: Risk-weighted assets SME: Small and Medium Enterprises TD: Term deposit TFF: Term Funding Facility VMA: Virgin Money Australia Bank of Queensland Limited 2021 Full Year Results Presentation BOQD GROUP 66