#1FY20 INVESTOR MATERIALS BOQD GROUP 14 OCTOBER 2020 Full Year ended 31 August 2020 BANK OF QUEENSLAND LIMITED ABN 32 009 656 740. AFSL NO 244616.#2CONTENTS FY20 RESULTS PRESENTATION ABOUT BOQ STRATEGY FY20 RESULTS COVID-19 BUSINESS IMPACTS PORTFOLIO QUALITY CAPITAL, FUNDING & LIQUIDITY DIVISIONAL RESULTS ECONOMIC ASSUMPTIONS Bank of Queensland Limited 2020 Full Year Results Presentation BOQD GROUP 3 32 36 39 45 56 61 68 72 2#3FY20 RESULTS PRESENTATION 14 OCTOBER 2020 Full Year ended 31 August 2020 BANK OF QUEENSLAND LIMITED ABN 32 009 656 740. AFSL NO 244616. BOQD GROUP#4AGENDA INTRODUCTION Cherie Bell, General Manager Investor Relations RESULTS OVERVIEW George Frazis, Managing Director and CEO FINANCIAL DETAIL AND PORTFOLIO ANALYSIS Ewen Stafford, Chief Financial Officer and Chief Operating Officer Adam McAnalen, Chief Risk 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 Adam McAnalen, Chief Risk Officer Bank of Queensland Limited 2020 Full Year Results Presentation BOQD GROUP 4#5RESULTS OVERVIEW BOQD GROUP GEORGE FRAZIS MANAGING DIRECTOR AND CEO#6REFRESHED EXECUTIVE 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 > EWEN STAFFORD Chief Financial Officer and Chief Operating Officer > Joined BOQ in November 2019 More than 30 years' of experience across financial services, > Started in the RAAF as an > engineer then a partner at BCG telecommunications, eCommerce and logistics, commercial property and professional services KPMG, MLC, NAB, Australia Post, Telstra, Deloitte ADAM MCANALEN Chief Risk Officer > 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 CRAIG RYMAN Chief Information Officer > Joined BOQ in July 2020 > More than 20 years' experience in financial services, leading technology transformation programs. > Previously CIO and COO at AMP Limited DEB ECKERSLEY Group Executive People and Culture > Joined BOQ as Group Executive, P&C in September 2018 > Previously Managing Partner at PwC, leading the Human Capital function > RACHEAL KELLAWAY Deputy Chief Financial Officer > Joined BOQ in June 2019 More than 20 years experience predominantly within the Banking industry > Previously General Manager in the Finance team at CBA LYN MCGRATH Group Executive Retail > Joined BOQ in August 2018 > > > Previously led Commonwealth > Bank's Retail Bank Branch distribution and specialist distribution areas Due to retire in December 2020 FIAMMA MORTON Group Executive BOQ Business Joined BOQ in June 2020 Extensive experience in Banking in Australia and the USA, previously CBA, Goldman Sachs, MasterCard and Westpac Bank of Queensland Limited 2020 Full Year Results Presentation > GREG BOYLE CEO Virgin Money Australia CEO of Virgin Money Australia since 2015 > Previously Strategy and Commercial Director at Virgin Money Australia and part of the Investment Management team for Virgin Group in London DANIELLE KEIGHERY Chief Customer Officer CHRIS SCREEN Chief Product Officer > Joined BOQ in November 2019 > Due to join BOQ in early 2021 > Previously, Chief Experience Officer at Virgin Australia > Has over 25 years experience in financial services > Previously held a number of senior distribution and product > Extensive Corporate Affairs, Brand, and Marketing experience roles at Westpac and NAB RECRUITING FOR CHIEF LEGAL OFFICER 6#7FY20 OVERVIEW BOQD GROUP 1. Lower statutory profit of $115m, reflecting the challenging environment and a year of transition 2. Business momentum, with revenue growing and good margin management 3. Supporting our customers and people during COVID-19, through banking relief packages and changes to ways of working, while ensuring business resilience 4. Delivering the strategic transformation - year of transition, simplified operating model, digital transformation on track, and balance sheet growth momentum 5. Well provisioned for potential COVID-19 impacts, $133m collective provision overlay taken for anticipated lifetime losses 6. Capital strength to support business growth and broader economic recovery, with CET1 of 9.78% 7. Dividend of 12 cps, in line with revised APRA guidance. Represents 6 cents from first half profits and 6 cents from second half profits Bank of Queensland Limited 2020 Full Year Results Presentation 7#8SUPPORTING OUR CUSTOMERS & PEOPLE THE ECONOMIC IMPACT OF COVID-19 HAS BEEN SIGNIFICANT BOQD GROUP OUR BUSINESS RESILIENCE · • · · CET1 at 9.78%, materially above APRA's "unquestionably strong" benchmark Strong liquidity with LCR at 164% and NSFR at 119%, well above regulatory targets Term Funding Facility at 25bps, providing capacity for lending to businesses • Well provisioned for potential losses - $133m COVID-19 collective provision raised in FY20 OUR CUSTOMERS • . All operations including branches have remained open for customers . . • Supported customers through Banking Relief Package and other product offerings including government SME loans Proactive contact with customers on the Banking Relief Package at 3 months and 6 months Working with customers who require additional support post the 6 month repayment holiday We have seen an 18.8% reduction in customer balances on deferrals since April 2020 OUR PEOPLE • • • Workforce quickly pivoted to remote working capabilities while continuing to support our customers Providing a safe environment for our people coming into work by implementing social distancing, COVID Safe Plans, temperature checking and enhancing other health and safety measures Supported employee wellbeing through counselling, appointment of COVID-19 advisory services, mental health information and training and flexible working arrangements Bank of Queensland Limited 2020 Full Year Results Presentation 8#9FY20 RESULTS LOWER STATUTORY PROFIT IN A STRATEGIC TRANSITION YEAR, FURTHER IMPACTED BY COVID-19 BOQD GROUP Key financial results FY20 FY19 FY20 v FY19 $ million Statutory net profit after tax 115 298 (61%) Cash earnings after tax 225 320 (30%) Cash return on average equity 5.4% 8.3% (290bps) ▼ Common Equity Tier 1 ratio 9.78% 9.04% 74bps Cash earnings per share Dividend per share Bank of Queensland Limited 2020 Full Year Results Presentation 51.1c 79.5c (36%) 12c 65c (82%) 6#10KEY ELEMENTS OF THE RESULT LENDING MOMENTUM AND MARGIN MANAGEMENT DRIVING RESULT, IMPACTED BY COLLECTIVE PROVISION OVERLAY FOR COVID-19 NII GROWTH ($M) +4% NET INTEREST MARGIN (%) +3bps BOQD GROUP 503 1.94 485 483 1.92 1.92 476 1.89 1H19 2H19 COST TO INCOME RATIO (%) 1H20 2H20 -20bps 1H19 2H19 1H20 LOAN IMPAIRMENT EXPENSE ($M) 2H20 FY20 147 $175m 3 41 28 28 123 10 54.3 54.1 51.8 12 2 50.1 16 31 26 21 1H19 2H19 1H202 2H20 ■Specific Collective COVID-19 1H19 2H19 1H20¹ 2H20 (1) Increase in costs driven by regulation and strategic investment as guided to the market Bank of Queensland Limited 2020 Full Year Results Presentation (2) 1H20 includes a $10m collective provision overlay in respect of COVID-19 10#11LENDING AND DEPOSIT GROWTH NICHE SEGMENT STRATEGY DELIVERING GROWTH BOQD GROUP GROWTH IN CUSTOMER DEPOSITS ($M) 2,334 GROWTH IN LENDING ($M) 1,462 1,103 1,537 250 937 1,135 641 702 (208) FY18 827 264 569 2 8 239 1,364 667 337 600 (567) 653 127 508 FY19 FY20 (10) 141 (26) ■Retail Bank ■Business Bank Other Deposits FY18 FY19 FY20 Other 1 Housing ■Commercial BOQ Finance Consumer BALANCED GROWTH ACROSS BUSINESS BANKING GLA ($M) GROWTH IN HOUSING GLA ($M) 653 141 508 819 794 644 626 508 250 345 932 914 714 667 8 (923) (649) 461 (1,378) 237 (65) 108 130 100 (21) (3) FY18 FY19 FY20 FY18 FY19 FY20 ■ VMA Housing BOQ Specialist Housing BOQ Retail Housing BOQ Business Housing (1) Includes Commercial, Agribusiness and SME lending Bank of Queensland Limited 2020 Full Year Results Presentation ■■BOQ Specialist Commercial BOQ Commercial¹ Asset Finance² (2) The reduction in Asset Finance growth reflects a strategic decision to focus on risk/ return in a declining market 11#12DIVISIONAL ACHIEVEMENTS RETAIL BANK BOQ Viryia money Housing Lending Growth ($m) (464) FY19 BOQ BUSINESS BOQ BUSINESS BOQ SPECIALIST Deposit Growth ($m) Commercial, Agri & SME Lending Growth ($m) 337 1,364 600 65 FY20 FY19 FY20 • • Retail Bank Net Interest Income increased 1% through home loan growth and improved margins • . • • Consumer NPS¹ ranked 3rd (up from 5th in FY19), Mortgage NPS ranked 5th (up from 11th in FY19) Home Buying Transformation program reduced `time to yes' from five days down to one 95% of OMS on new franchise agreement VMA phase 1 on track for soft launch in December 2020 • • 127 BOQD GROUP BOQ FINANCE Deposit Growth ($m) 239 1,537 FY19 FY20 FY19 FY20 BOQB Net Interest Income increased 3% due to good growth and margin management SME NPS² ranked 3rd (up from 4th in FY19) Continued focus on niche segments delivering good growth with all business lines outperforming system BOQ Finance book maintained in a declining market - balancing growth and margin considerations • Relationship banking support to customers through COVID-19 New mobile app for BOQS with ApplePay Bank of Queensland Limited 2020 Full Year Results Presentation (1) RFI XPRT Report, August 2020 and August 2019 (2) DBM Atlas BFSM Report August 2020. SME NPS refers to Any Financial Relationship (AFR) and businesses under $40m turnover. 12#13DRIVING BOQ FORWARD EXECUTING ON STRATEGY TO DRIVE BUSINESS UPLIFT - GOOD PROGRESS WITH MORE WORK TO DO BOQD GROUP Delivering against key metrics High calibre team Superior project execution capabilities Objective FY19 High calibre Executive and Senior Management High level of Executive turnover Lift employee engagement Simplified and streamlined mortgage process to reduce time to yes Enhanced customer experience - uplift in customer and mortgage NPS² Lending growth momentum - growing market share NIM management Productivity benefits of c.$30m p.a. Delivering against 8 core tier 1 projects Strategic reset of intangibles portfolio 56% +5 days Consumer ranked 5th Mortgage ranked 11th Business ranked 4th 0.2x system Housing (net growth $141m) 1.2x system Business (net growth $127m)¹ 5bps decline Capital investment of $92m Limited execution capability 135 intangible assets on balance sheet FY20 Key Executive roles filled with experienced leaders and strong execution capability 59% 1 day Consumer ranked 3rd Mortgage Ranked 5th Business Ranked 3rd 0.9x system Housing (net growth $508m) + large Business (net growth $337m)² 2bps decline for FY20, 3bps up 2H20 vs. 1H20 $30m Increased regulatory costs and investments as guided to the market Capital investment of $100m 6 core transformation projects completed, including data centres in cloud, and VMA on track for 2020 58 intangible assets on balance sheet Bank of Queensland Limited 2020 Full Year Results Presentation (1) GLA data has been aligned for the new APRA regulatory definitions applicable from 1 July 2019 (2) Excludes BOQF; (2) RFI XPRT Report August 2019, August 2020 13#14building the digital bank of the future Executing on our strategy - VMA phase 1 on track for soft launch by December Virgin money Executing on our strategy Ꮬ Leveraging existing scale Setting the foundation for BOQ's digital transformation Partnership as a strategic advantage Cloud based core banking platform for the Retail Bank Market leading technology solution VMA as a growth engine, improving ROE Clear roadmap for phase 2 Success Deliveroo adventure let the begin Beautifully simple money Rewards 3 143451 6 wwww Your and mais open to use 14 Woo-hoo!#15FINANCIAL DETAIL & PORTFOLIO QUALITY BOQD GROUP EWEN STAFFORD CHIEF FINANCIAL OFFICER AND CHIEF OPERATING OFFICER ADAM MCANALEN CHIEF RISK OFFICER#16FINANCIAL PERFORMANCE STATUTORY PROFIT DOWN, UNDERLYING PROFIT UP IN THE HALF DRIVEN BY INCOME GROWTH BOQD GROUP $ million FY20 FY19 FY20 v FY19 2H20 1H20 2H20 v 1H20 Net interest income 986 961 3% 503 483 4% Non-interest income 110 128 (14%) 52 58 (10%) Total income 1,096 1,089 1% 555 541 3% Operating expenses (594) (555) 7% (300) (294) 2% Underlying profit 502 534 (6%) 255 247 3% Loan impairment expense (175) (69) 154% (147) (28) 425% Cash profit before tax 327 465 (30%) 108 219 (51%) Income tax expense (102) (145) (30%) (34) (68) (50%) Cash earnings after tax 225 320 (30%) 74 151 (51%) Statutory net profit after tax 115 298 (61%) ▼ 22 93 (76%) Cash basic earnings per share¹ 51.1c 79.5c (28.4c) 16.3c 35.3c (19.0c) Cash return on average equity 5.4% 8.3% (290bps) 3.4% 7.5% (410bps) ▼ (1) The sum of 1H20 and 2H20 EPS does not equal FY20 due to the impact of the capital raising and the uneven distribution of cash earnings after tax across the two halves of the year Bank of Queensland Limited 2020 Full Year Results Presentation 16#17NON CASH EARNINGS STATUTORY NPAT DOWN 61% DUE TO TRANSFORMATION INVESTMENT $ million BOQD GROUP FY20 FY19 2H20 1H20 225 320 74 151 Cash earnings after tax Strategy Refresh (after tax) Intangible Asset Review (Policy change (19m) / Strategic Impairments (27m) / Amort. Acceleration (8m) / Other (3m)) (57) 0 (25) (32) Operating Model Review (Restructuring charges (13m) / Transformation Charge (7m) / Other (3m)) (23) 0 (8) (15) Employee pay and entitlements review (8) 0 (8) 0 Other Non-Cash Items (after tax) Amortisation of acquisition fair value adjustments Hedge ineffectiveness Integration/transaction costs Regulatory/compliance Other legacy items Statutory net profit after tax Bank of Queensland Limited 2020 Full Year Results Presentation (4) (6) (2) (10) (8) (7) 23 (2) (3) 0 (1) 0 0 (5) (6) (3) (2) (3) (1) 1 (4) 115 298 22 93 17#18NET INTEREST MARGIN GOOD NIM MANAGEMENT BALANCING GROWTH WITH RETURNS NET INTEREST MARGIN – 1H20 TO 2H20 - 1.89% 0.13% 0.09% 0.04% 0.05% 0.00% BOQD GROUP 1.92% 1H20 Asset Pricing & Mix Funding Costs & Mix Hedging Costs Capital & LCDs Liquidity & Other 2H20 SUMMARY • Margin benefits from repricing activity, partially offset by front to back book drag Funding costs increased as cash rate reduced KEY NIM MOVEMENTS OVER TIME Element 2H19 1H20 2H20 Asset pricing and mix +2bps +6bps +13bps Funding costs & mix (5bps) (5bps) (9bps) • Hedging cost benefits as basis costs continue to reduce Hedging costs +3bps +4bps +4bps . • Impacts to NIM from elevated liquidity Capital & LCDs (2bps) (3bps) (5bps) Third party costs/AASB 16 (3bps) +1bps Liquidity (2bps) (1bps) 18 Bank of Queensland Limited 2020 Full Year Results Presentation#19OPERATING EXPENSES INCREASED INVESTMENT IN STRATEGIC INITIATIVES, RISK AND COMPLIANCE PROGRAMS BOQD GROUP SUMMARY Increased technology spend on strategic initiatives (VMA Phase 1 and core infrastructure modernisation) OPERATING EXPENSE BREAKDOWN ($M)¹ +4% +2% +2% -5% [14] 594 +4% 11 —11. 30 • Increased employee and 555 12 21 administrative expenses relating to risk and regulatory programs 49 16 40 39 • Excluding technology and risk and compliance spend, underlying expenses decreased 1% • Reduction in occupancy costs, general expenses, and discretionary spending 499 Underlying Expenses -1% 495 FY19 Actual Risk & Regulatory programs Digital & Technology programs Inflation Other growth Productivity benefit FY20 Actual ■Underlying Expenses Amortisation Projects ■VMA Digital Bank Bank of Queensland Limited 2020 Full Year Results Presentation (1) FY19 includes a restatement of employee costs from impairment on loans and advances to expenses 19#20ENHANCING OUR EXECUTION CAPABILITY GOOD PROGRESS ON OUR STRATEGIC TRANSFORMATION • EXECUTION CAPABILITY UPLIFT Integrated strategy planning and investment portfolio management • Enhanced benefits realisation framework . FY20 CAPITAL INVESTMENTS Financial and Risk Position Regulatory & compliance programs • Global Risk & Compliance system t Phase 1 Open Banking Adaptive delivery methods enhancing 'time to market' and 'time to value' Streamline governance and new Project Portfolio Management tools Simple and intuitive Contact Centre telephony platform Home Buying Transformation Program Bank of Queensland Limited 2020 Full Year Results Presentation BOQD GROUP Purpose Led Culture • People & Culture programs Distinctive brands serving niche segments Customer Relationship Management Tool • ☐ Digital Bank of the Future • • • VMA Phase 1 Modernisation of core infrastructure New BOQS mobile app and internet banking 20#21CAPITAL INVESTMENT INVESTMENT PRIORITISED ALONG STRATEGIC ROADMAP BOQD GROUP SUMMARY CAPITAL INVESTMENT ($M) • Capital investment of $100m in line with strategic roadmap 95 100 71 Investment spend focused on core 48 60 infrastructure modernisation and VMA digital bank 46 52 25 FY18 35 FY19 FY20 ■1H 2H • Reduction in software intangibles balance from: change to capitalisation threshold ($27m) amortisation acceleration and impairments arising from strategic changes ($50m) • 58 existing intangible assets SOFTWARE INTANGIBLE ASSET BALANCES ($M) -27 232 100 117 115 2H19 FY20 Software investment Capitalisation threshold change Strategic Changes ■Software intangible assets balance Bank of Queensland Limited 2020 Full Year Results Presentation -50 -39 216 121 95 Amortisation 2H20 Assets under construction 21#22PORTFOLIO AND LOAN IMPAIRMENT EXPENSE PRUDENT PROVISIONING LEVELS GIVEN ONGOING UNCERTAINTY BOQD GROUP PROVISIONS ($M) +57% LOAN IMPAIRMENT EXPENSE ($M) 147 369 FY20 $175m 3 214 233 235 133 41 28 28 123 10 137 148 142 10 140 12 2 77 85 85 94 16 31 26 21 1H19 2H19 1H20 2H20 1H19 2H19 1H201 2H20 Specific Collective COVID-19 IMPAIRED ASSETS ($M) -0.5% ■Specific Collective COVID-19 LOAN IMPAIRMENT EXPENSE TO GLA (BPS)² 197 196 195 152 23 225 26 28 34 73 74 71 60 69 98 94 90 1H19 2H19 1H20 2H20 62 12 1H19 18 12 2H19 1H20 2H20 ■Commercial Housing & Consumer Asset finance Bank of Queensland Limited 2020 Full Year Results Presentation (1) 1H20 includes a $10m collective provision overlay in respect of COVID-19 (2) Collective provision overlay in respect of COVID-19 represents 28bps of GLA 22#23FUNDING & LIQUIDITY RESILIENT FUNDING & LIQUIDITY PROFILE WITH STRATEGIC OPTIONS TO GROW SUMMARY Deposit to loan ratio of 74% . Strong customer deposit growth during FY20 • Reduced reliance on short term wholesale funding . • Term funding facility providing additional funding capacity to lend to businesses BOQ redeemed Wholesale Capital Notes in May 2020 following approval granted by APRA, a new issue of ASX-listed Additional Tier 1 capital notes remains under consideration subject to market conditions and relevant approvals1 CUSTOMER DEPOSITS ($BN) +7% 31.3 32.4 34.7 2.0 2.3 2.8 16.5 16.2 15.1 10.2 11.2 13.3 26 27 3.5 FY18 FY19 FY20 BOQD GROUP FUNDING MIX ($BN) +1% 48.1 50.3 50.8 31.3 32.4 34.7 6.8 5.9 4.8 10.0 12.0 11.3 FY18 FY19 FY20 ■Long Term Wholesale ■Short Term Wholesale ■Customer Deposits TERM FUNDING FACILITY ($BN)² 2.6 0.8 1.8 0.6 ADDITIONAL CAPACITY 1.2 0.8 1.4 Transaction Accounts Savings and Investments Term Deposits Mortgage Offsets TFF Drawn Amount ■Initial Allowance Additional Allowance Supplementary Allowance FY21 Senior Maturities (1) Any offer of ASX-listed Additional Tier 1 capital securities by BOQ will be made under a prospectus which will be made available when the securities are offered. If an offer is made, eligible applicants wishing to apply will need to do so in accordance with the instructions set out in the prospectus Bank of Queensland Limited 2020 Full Year Results Presentation (2) As at 1 September 2020. The Additional Allowance provided by the RBA is subject to change 23#24CAPITAL GOOD CAPITAL POSITION WITH FLEXIBILITY TO ADAPT TO CHANGING CONDITIONS CET1 1H20 VS 2H20 9.91% 0.51% 43bps BOQD GROUP 0.08% 0.39% 0.09% 0.09% 0.03% 0.04% 9.78% 1H20 2H20 Cash NPAT RWA Growth (Excl. COVID) COVID-19 (Incl. DTA) Statutory Adjustments Net CAPEX Securitisation Impact Other Items FY20 ך SUMMARY · Capital raise provided significant uplift in CET1 • Good underlying capital generation of 43bps in 2H20 · . Lending growth driving small uplift in RWAS • COVID-19 provision and statutory adjustments absorbed during the half OUTLOOK • ⚫ CET1 of 9.78% sees the bank in a strong position BOQ well capitalised to manage any further impacts from COVID-19 Sufficient capital to support transformation agenda and asset growth momentum Bank of Queensland Limited 2020 Full Year Results Presentation 24#25PORTFOLIO QUALITY ELEVATED ARREARS IN RESPONSE TO COVID-19 BOQD GROUP SUMMARY ⚫ Housing and commercial arrears increased during the half as economic conditions worsened due to COVID-19 COMMERCIAL ARREARS (bps) 224 ⚫ 90 days is elevated due to changed enforcement activities and slower transitions back to performing 138 148 150 129 140 147 140 119 . Increased arrears in May 2020 resulted from a slowdown in collection activity 108 116 96 102 113 114 90 86 96 . • Arrears uplift in line with industry Aug-18 Feb-19 Aug-19 Feb-20 Aug-20 HOUSING ARREARS (bps) BOQ FINANCE ARREARS (bps) 140 113 92 93 100 112 102 90 99 110 90 84 68 68 47 48 62 52 57 85 36 61 62 76 44 49 51 53 54 13 18 17 7 9 14 13 19 Feb-19 Aug-19 Feb-20 Aug-18 (1) Arrears figures differ from those reported to APRA due to different definitions. Arrears figures have been normalised following processing of banking relief package requests Bank of Queensland Limited 2020 Full Year Results Presentation Aug-20 Aug-18 Feb-19 Aug-19 Feb-20 Aug-20 30DPD 90DPD 25#26BANKING RELIEF PACKAGES AUGUST 2020 WELL DIVERSIFIED PORTFOLIO ACROSS GEOGRAPHIC AND INDUSTRY SEGMENTS KEY MESSAGES • Well diversified portfolio across geography, industry and asset class BOQD GROUP TOTAL DEFERRAL BALANCES ($BN)¹ 7.7 7.6 7.2 (18.8%) 6.5 6.2 2.8 2.8 2.7 2.6 2.5 . 25% of customers on relief continued to make full or partial repayments 4.8 4.7 4.5 . Total deferrals have decreased 18.8% since their peak in April 3.9 3.7 • Banking relief package take-up is broadly consistent with our underlying industry and geographic spread •Individual reviews completed of all high risk segments with loans >$10m not eligible for deferral THREE MONTH CHECK IN OUTCOMES Apr-20 May-20 Jun-20 Jul-20 Aug-20 ■HL deferral balances Business lending deferral balances Bank of Queensland Limited 2020 Full Year Results Presentation $3.7BN $2.5BN 1% 1% 3% 8% 17% 12% Remaining on existing BRP Cancelled BRP Seeking relief beyond 6 months 79% 79% Other COVID-19 support Change to interest only Housing Loan Deferrals SME Deferrals (1) Total deferral balances differ from those reported to APRA 26#27HOUSING LOAN BANKING RELIEF PACKAGES AUGUST 2020 DEFERRALS REDUCING SINCE PEAK IN APRIL BOQD GROUP KEY MESSAGES 12% of home loan customers currently on deferral Housing deferrals have average LVR of 65% 92% of BRP customers have an LVR of less than 90% HOME LOAN DEFERRAL BALANCES ($BN) 15 20% 15% 15% 15% 13% 15% 12% 10 10% 13 13 12 11 5 • 30% of housing deferral customers are more than 3 payments in advance 4.8 4.5 0 Apr-20 May-20 Deferral balances ($bn) 11 5% 4.7 3.9 3.7 0% Jun-20 Jul-20 Aug-20 Number of accounts deferred (000s) Deferral balance as % of total home lending HOME LOAN DEFERRAL BALANCES BY LVR (%) HOME LOAN DEFERRAL BALANCES BY STATE 8% 14% ■ Up to 40% 16% 21% ■40% - 60% 60% - 80% ■80% - 90% ■Above 90% 48% 45% 26% 21% 17% 15% 10% 11% 4% 3% 41% QLD NSW & ACT VIC WA Other ■% Deferral Balance % Portfolio Balance Note: Deferral balances are divided by the total Housing GLAs to determine the deferral percentage and vary to the APRA definition of loans Bank of Queensland Limited 2020 Full Year Results Presentation 27#28SME BANKING RELIEF PACKAGES AUGUST 2020 DEFERRALS REDUCING SINCE PEAK IN APRIL KEY MESSAGES SME DEFERRAL BALANCES ($BN) 25 • 16% of SME customers currently on deferral 20 21 20 • 37% of SME deferrals relating to healthcare, primarily dental 19 20 15 18% 18% 17% 10 • Individual reviews completed of all loans >$10m not eligible for deferral • Minimal exposure to accommodation and food services (including tourism) SME DEFERRAL BALANCES BY INDUSTRY BOQD GROUP 40% 20 19 30% 17% 16% 20% 10% 5 2.8 2.8 2.7 2.6 2.5 0 r 0% Apr-20 May-20 Jun-20 Jul-20 Aug-20 I Deferral balances ($bn) Number of accounts deferred (000s). Deferral balance as % of total business lending SME DEFERRAL BALANCES BY LOCATION 37% 41% 35% 24% 23% 24% 25% 14% 14% 11%12% 4% 3% 4% 14% 19% 21% 7% 7% 8% 6% 2% 8% 7% 5% 5% 5% <1% 9% 6% Health Care Property Construction Professional Services Agriculture Transport Manufacturing Accommodation Others QLD NSW VIC WA NZ Other & Food Services ■% Deferral balance ■% of SME portfolio balance % Portfolio balance ■% Deferral balance Note: Deferral balances are divided by the total Commercial GLAS to determine the deferral percentage and vary to the APRA definition of loans Bank of Queensland Limited 2020 Full Year Results Presentation 28#29SUMMARY & OUTLOOK BOQD GROUP GEORGE FRAZIS MANAGING DIRECTOR AND CEO#30FY20 SUMMARY BOQD GROUP 1. Focus has been on supporting our customers and people during COVID-19 2. Delivered solid revenue growth in a challenging year, with momentum continuing 3. Prudent COVID-19 collective overlay and strong capital, positions us well for the future 4. Executing on our strategy as planned, overcoming legacy structural disadvantages 5. Leaning into a health and economic crisis that has been well managed by the Government and regulators Bank of Queensland Limited 2020 Full Year Results Presentation 30#31BOQD GROUP FY21 OUTLOOK1 1. Uncertain outlook given COVID-19, but Australia relatively well placed • Less likelihood of downside scenarios on unemployment and house prices given Government stimulus - uncertainty until vaccine developed 2. Remain committed to transformation strategy and capital investment of $100m 3. Expecting broadly neutral jaws Above system growth in lending • Margin managed to within 2-4bps decline • Cost growth of c.2% 4. Prudent collective provision COVID-19 overlay taken in FY20 for anticipated lifetime losses 5. Continuation of strong balance sheet with CET1 ratio remaining above the top end of our target range 6. Return to sustainable profitable growth, supporting returns to shareholders and dividends 1. Subject to no material change in market conditions Bank of Queensland Limited 2020 Full Year Results Presentation 31#32ABOUT BOQ BOQD GROUP#33BOQ UNIQUE BRANDS IN NICHE SEGMENTS SERVING CUSTOMERS FOR 146 YEARS OUR DIFFERENTIATORS > Unique brands with proud history > Deeply anchored in local communities KEY STATISTICS FOR FY20 c.900k Customers c.575k BOQ c. 200k VMA > Highly specialised bankers, within niche industry segments > Building an innovative digital offering and loyalty BOQD GROUP c.35k Specialist c.85k Finance OUR DISTINCTIVE BRANDS Retail Banking 165 Branches² >2k Employees $82b Footings The digital bank Human, empathetic BOQ relationship-led banking Virgin money of bigger possibilities Business Banking 74% Deposit-to- Loan Ratio 1.59%¹ Market share - Housing 1.75%¹ Market share - Business BOQ BOQ BUSINESS FINANCE BOQ SPECIALIST Specialised banking solutions that meet core business and personal needs (1) Internal BOQ Analysis and APRA monthly authorised deposit-taking institution statistics excluding International Institutional banks, August 2020 (2) Total branches includes transaction and service centres Bank of Queensland Limited 2020 Full Year Results Presentation 33#34DISTRIBUTION FOOTPRINT SUMMARY • In FY20 branch numbers reduced by 2 to 165 (incl. transaction centres) ⚫ The franchise network remains a key differentiator for BOQ and is pivotal to the Bank's deposit raising capabilities • • 95% franchisees transitioned to the new franchise revenue share agreement Continue to build broker presence during 2020 with 33% of housing settlements originated out of VMA and BOQ branded accredited brokers in 2H20 12 6 644 446 87 49 1 17 13 33 58 954 1 4 702 235 290 7 BOQD GROUP 283 216 199 9 18 1,363 1,361 125 350 9 AS AT 31 AUGUST 2020 10 1,144 1,315 105 72 63 CORPORATE BRANCHES 567 BOQ BRANDED ATM'S 95 OWNER MANAGED BRANCHES 995 REDI ATM'S 4,435 BROKERS ACCREDITED WITH BOQ 7 TRANSACTION CENTRES 4,109 BROKERS ACCREDITED WITH VMA Bank of Queensland Limited 2020 Full Year Results Presentation 2 30 56 F 14 31 34#35DISTRIBUTION FOOTPRINT MOVEMENTS BOQD GROUP Aug-20 Corporate branches QLD 33 NSW / ACT 9 VIC WA NT TAS SA Total 9 12 63 Owner managed branches 58 18 10 6 2 95 Transaction centres 7 - - - 7 98 27 19 18 1 2 165 Aug-19 QLD NSW/ACT VIC WA NT TAS SA Total Corporate branches 34 10 9 12 Owner managed branches 58 18 10 6 Transaction centres 7 - - 99 28 19 18 1 1212 557 65 95 167 CORPORATE, OWNER MANAGED BRANCHES & TRANSACTION CENTRES 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 2020 Full Year Results Presentation FY20 Actual YTD Gross Net 1 1 1 1 2 0 3 0 3 0 0 0 10 2 35#36STRATEGY BOQD GROUP#37PURPOSE & VALUES, AMBITION AND STRATEGIC PILLARS CLEAR PRIORITIES FOCUSED ON CUSTOMERS, PEOPLE AND SHAREHOLDERS BOQD GROUP PURPOSE & VALUES Creating prosperity for our customers, shareholders and people through empathy, integrity and by making a difference OUR AMBITION We will be known as the bold challenger bank; with multi-brands that are digitally enabled with a personal touch Our empathetic culture sets us apart Distinctive brands service attractive niche customer segments OUR STRATEGIC PILLARS Digital bank of the future with a personal 0 touch Simple and intuitive business with strong execution capability Strong financial and risk positions, with attractive returns Bank of Queensland Limited 2020 Full Year Results Presentation 37#38Strategic Pillars STRATEGY UPDATE EXECUTING ON OUR STRATEGY WITH EARLY RESULTS BOQD GROUP 1 2 3 4 5 Our purpose led empathetic culture sets us apart Distinctive brands serving attractive niche customer segments Digital Bank of the future with a personal touch Simple and intuitive business with strong execution capability Strong financial and risk position, with attractive returns ✓ Refreshed Purpose & Values, culture survey completed and action plan developed ✓ Retail NPS rank increased to 3rd (5th FY19) and Mortgage NPS rank improved to 5th (11th FY19) Action plan implemented to manage COVID-19 hardship and deferrals ✓ Employee engagement score 59% (up from 56% in FY19) Home lending growth of >$508m (0.9x system) ✓ Business Lending & Asset Finance growth of >$345m (positive compared to a contracting system) ✓ 95% of OMBS on new franchise revenue share agreement ✓ Re-invigorated 3rd party distribution ✓ VMA Digital Bank phase 1 on track for soft launch by December Delivery of new mobile app for BOQS with Apple Pay ✓ Migration of data centres to the cloud ✓ Pathway to accelerate BOQ Retail Bank transition to future state platform being explored ✓ ~$30m Productivity benefits in FY20 ✓ 15% reduction in products available for sale ✓ Time to conditional approval down to 1 day from over 5 days ✓ Project execution and governance review completed and uplift plan being implemented $340m capital raising completed pre COVID-19 ✓ Deposit to Loan ratio 74% ✓ Improved risk-based pricing and margin management ✓ Governance risk and compliance system Bank of Queensland Limited 2020 Full Year Results Presentation 38#39FY20 RESULTS BOQD GROUP#40FY20 RESULTS OVERVIEW BOQD GROUP Financial FY20 FY20 v FY19 FY20 Balance Sheet, Capital & Funding FY20 v FY19 Statutory NPAT $115m (61%) CET1 9.78% +74bps Cash NPAT $225m (30%) Total GLAS $47,043m +2% ROE (cash) 5.4% (290bps) Customer Deposits $34,762m +7% EPS cents (cash) 51.1c (36%) Deposit to Loan Ratio 74% +4% DPS 12c (82%) LT Wholesale Funding $11.3bn (6%) Cost-to-income 54.2% 320bps Liquidity Coverage Ratio 164% +19% NIM 1.91 (2bps) Net Stable Funding Ratio 119% +7% Total Income $1,096m +1% BBB+/ A-/A3 Fitch Ratings has revised the Outlook on BOQ's Operating Expenses $594m +7% Credit Ratings (S&P/ Fitch/ Moodys) Negative from Stable on Long-Term Issuer Default Rating to 30th April 2020 LIE to GLA 37bps +22bps Bank of Queensland Limited 2020 Full Year Results Presentation 40#41AVERAGE BALANCE SHEET & MARGIN - FY20 & FY19 BOQD GROUP AVERAGE BALANCE SHEET AND MARGIN ANALYSIS August 2020 (Full Year) $millions INTEREST EARNING ASSETS Gross loans & advances at amortised cost Investments & other securities Total interest earning assets Non-interest earnings assets Average balance $m Interest Average rate Average balance $m % $m August 2019 (Full Year) Interest $m Average rate % 44,375 1,676 3.78% 43,616 1,913 4.39% 7,388 120 1.63% 6,226 145 2.33% 51,763 1,796 3.47% 49,842 2,058 4.13% Property, plant & equipment 157 54 Other assets 1,696 1,594 Provision for impairment -257 -215 Total non-interest earning assets 1,596 1,433 Total assets 53,359 51,275 INTEREST BEARING LIABILITIES Retail deposits 30,378 388 1.28% 29,236 576 1.97% Wholesale deposits & borrowings 17,603 422 2.40% 17,303 521 Total Interest bearing liabilities 47,981 810 1.69% 46,539 1,097 3.01% 2.36% Non-interest bearing liabilities 1,240 876 Total Liabilities Shareholders' funds 49,221 47,415 4,138 3,860 53,359 51,275 Total liabilities & shareholders' funds INTEREST MARGIN & INTEREST SPREAD Interest earning assets 51,763 1,796 3.47% 49,842 2,058 4.13% Interest bearing liabilities 47,981 810 1.69% 46,539 1,097 2.36% Net interest spread 1.78% 1.77% Benefit of net interest-free assets, liabilities and equity 0.13% 0.16% NIM on average interest earning assets 51,763 986 1.91% 49,842 961 1.93% Bank of Queensland Limited 2020 Full Year Results Presentation 41#42AVERAGE BALANCE SHEET & MARGIN - HALF ON HALF BOQD GROUP AVERAGE BALANCE SHEET AND MARGIN ANALYSIS August 2020 (six month period) February 2020 (six month period) $millions INTEREST EARNING ASSETS Gross loans & advances at amortised cost Investments & other securities Total interest earning assets Non-interest earnings assets Average balance $m Interest Average rate Average balance Interest Average rate $m % $m $m % 44,362 809 3.62% 44,285 867 3.94% 7,564 55 1.45% 7,122 65 1.84% 51,926 864 3.30% 51,407 932 3.65% Property, plant & equipment 162 154 Other assets 1,711 1,685 Provision for impairment -277 -233 Total non-interest earning assets 1,596 1,606 Total assets 53,522 53,013 INTEREST BEARING LIABILITIES Retail deposits 30,681 174 1.13% 29,863 213 1.43% Wholesale deposits & borrowings 17,298 187 2.15% 17,918 236 2.65% Total Interest bearing liabilities 47,979 361 1.49% 47,781 449 1.89% Non-interest bearing liabilities 1,298 1,189 Total Liabilities Shareholders' funds 49,277 48,970 4,245 4,043 53,522 53,013 Total liabilities & shareholders' funds INTEREST MARGIN & INTEREST SPREAD Interest earning assets 51,926 864 3.30% 51,407 932 3.65% Interest bearing liabilities 47,979 361 1.49% 47,781 449 1.89% Net interest spread 1.81% 1.76% Benefit of net interest-free assets, liabilities and equity 0.11% 0.13% NIM on average interest earning assets 51,926 503 1.92% 51,407 483 1.89% Bank of Queensland Limited 2020 Full Year Results Presentation 42#43NON-INTEREST INCOME DECLINING NON-INTEREST INCOME IN LINE WITH INDUSTRY TRENDS AND COVID WAIVERS AND REDUCTIONS BOQD GROUP SUMMARY NON-INTEREST INCOME BREAKDOWN ($M) Non-interest income declined by $18m due to: Ongoing industry trends towards low and no fee products 145 1 19 128 5 11 110 COVID-19 impacts including reduced transaction and dishonour fee income, removal of certain fee charges and the suspension of Velocity aligned offers 32 5 30 30 11 25 Reduction in debtor finance fees following the sale of the business in 2H19 Bank of Queensland Limited 2020 Full Year Results Presentation 93 82 82 69 69 FY18 FY19 FY20 Trading Income ■ Insurance Other ■Banking 43#44CASH EPS Basic EPS Diluted EPS Reconciliation of Cash Earnings for EPS Year End Performance BOQD GROUP Half Year Performance Aug-20 Aug-19 Aug 20 vs Aug 19 Aug-20 Feb-20 Aug 20 vs Feb 20 (cents) (cents) 51.1 46.3 79.5 (36%) 16.3 73.9 (37%) 15.3 35.3 32.2 (54%) (52%) Cash earnings available for ordinary ($ million) 225 320 74 151 shareholders (30%) (51%) Add: Convertible Preference Shares Dividend ($ million) 0 0 0% Add: CAN ($ million) 4 7 (43%) Add: Capital Notes ($ million) 11 14 (21%) 015 0 0% 3 (67%) 6 (17%) Cash diluted earnings available for ordinary 240 341 (30%) 80 160 (50%) shareholders ($ million) Weighted Average Number of Shares (WANOS) Basic WANOS ($ million) 441 402 10% 454 428 6% Add: Effect of award rights ($ million) 2 1 100% 2 2 0% Add: Effect of CPS ($ million) 0 0 0% 0 0 0% Add: Effect of WCN ($ million) 18 17 6% 12 20 (40%) Add: Effect of Capital Notes ($ million) 59 39 51% 59 47 26% Diluted WANOS for cash earnings EPS ($ million) 520 462 13% 527 497 6% Note: The sum of 1H20 and 2H20 EPS does not equal FY20 due to the impact of the capital raising and the uneven distribution of cash earnings after tax across the two halves of the year Bank of Queensland Limited 2020 Full Year Results Presentation 44#45COVID-19 BUSINESS IMPACTS BOQD GROUP#46SUPPORTING OUR CUSTOMERS RELIEF PACKAGES DESIGNED FOR OUR RETAIL AND BUSINESS BANKING CUSTOMERS BOQD GROUP SMALL BUSINESS CUSTOMERS Business Banking Relief Package offering eligible small business customers with up to $10m in lending a 6 month deferred repayment period. Providing eligible SME customers access to unsecured overdraft of up to $250k with material reduction in rates, co-guaranteed with Government. > Reductions to business term loan and overdraft interest rates Λ Waiver of business transaction account monthly account maintenance fees for 6 months Waiver of merchant terminal fees > Paused spending qualification criteria for Business Performance saver accounts PERSONAL CUSTOMERS Λ Personal Banking Relief Package providing eligible customers a deferred repayment period of up to 6 months Reduced interest rates on fixed rate home loans Providing cashflow options to home loan customers ahead on repayments, including interest only, offset, and redraw facilities Paused minimum monthly transaction qualification for Fast Track accounts Temporarily paused cash management account monthly fees Bank of Queensland Limited 2020 Full Year Results Presentation 46#47COLLECTIVE PROVISION DRIVERS INCREASED PROVISIONS IN LIGHT OF ECONOMIC UNCERTAINTY SUMMARY • FY20 COVID-19 related collective provision totals $133m Increase provision is the result of a change in forecast assumptions towards higher unemployment, downgrades to property prices, and increased duration of the economic downturn Probability weightings to the downside and severe case scenarios have increased COLLECTIVE PROVISION ($M) 339 64 210 62 275 148 FY19 FY20 Collective Provision GRCL BOQD GROUP ECONOMIC ASSUMPTION - 31 AUGUST 2020 Base Downside Severe Economic Assumptions 2020 2021 2022 2020 2021 2022 2020 2021 2022 GDP Movement (%) -6.0% 5.0% 4.0% -7.5% 4.0% 3.0% -9.0% 5.0% 3.5% Unemployment Rate (%) 10.0% 8.5% 7.0% 10.5% 9.0% 7.5% 12.0% 10.0% 8.0% Residential property price -6.0% -5.0% 5.0% -10.0% -7.5% 5.0% -12.5% -10.0% 0.0% movement (%) Commercial property price -10.0% -5.0% 5.0% -15.0% -7.5% 5.0% -20.0% -10.0% 0.0% movement (%) COVID-19 CP ($m) $109m $185m $285m Scenario weighting (%) 75% 20% 5% CP overlay $133m Bank of Queensland Limited 2020 Full Year Results Presentation 47#48PROVISION COVERAGE SUMMARY Specific provisions to impaired assets remained broadly flat Increased collective provision by $133m in response to potential COVID-19 economic impacts Coverage levels remain strong compared to peers TOTAL PROVISION & GRCL / IMPAIRED ASSETS (%) 197 1H19 163 2H19 166 1H20 BOQD GROUP SPECIFIC PROVISIONS / IMPAIRED ASSETS (%) 51 43 1H19 2H19 43 48 1H20 2H20 PROVISION COVERAGE VS PEERS (bps)¹ 127 127 116 119 236 101 102 91 29 50 32 2H20 (1) Collective provisions and GRCL as a proportion of risk weighted assets. Note: BOQ figures are for the period to August 2020. Bank of Queensland Limited 2020 Full Year Results Presentation 87 88 69 59 119 127 102 91 77 BOQ Reg 1 Reg 2 Collective Provision Major 1 Major 2 Major 3 General Reserve for Credit Losses Major 4 48#49HOUSING LOAN DEFERRALS AUGUST 2020 BOQD GROUP SUMMARY 12% of housing customers on BRP as at August HOUSING LOAN DEFERRALS - BALANCES & ACCOUNT NUMBERS 15 20% 15% 15% 15% • Deferral balances continue to reduce since the peak in April Average LVR of 65% 13% 15% 12% 10 10% 13 13 12 11 • 92% of customers on BRP have an LVR <90% 5 4.8 4.7 4.5 • BRP portfolio composition broadly consistent with the total housing loan portfolio 0 Apr-20 May-20 Deferral balances ($bn) 11 5% 3.9 3.7 0% Jun-20 Jul-20 Aug-20 Number of accounts deferred (000s) Total % BRP Portfolio Avg LVR <70% LVR >70% LVR >80% LVR >90% LVR Deferral balance as % of total home lending HOUSING LOAN DEFERRALS - BY CHANNEL Deferral 100% 65% 51% 49% 24% 8% balances Less than 3 54% 45% months 70% 66% 64% 36% 18% 7% 22% 18% ahead of 15% 10% 12% 11% 7% 5% repayments Corporate OMB Broker BOQS VMA Not covered 82% 62% 66% 34% 11% 1% ■% Deferral balance ■% Portfolio balance by LMI Bank of Queensland Limited 2020 Full Year Results Presentation 49#50HOUSING LOAN DEFERRALS AUGUST 2020 DEFERRALS BY LVR BAND DEFERRALS BY STATE BOQD GROUP 41% 44% 48% 45% 21% 21% 26% 14% 13% 16% 16% 21% 17% 15% 8% 6% 10% 11% 4% 3% Up to 40% 40% - 60% 60%-80% 80%-90% Above 90% QLD NSW & ACT VIC WA Other ■% Deferral Balance % Portfolio Balance ■% Deferral Balance % Portfolio Balance DEFERRALS BY BALANCE 40% 42% 28% 26% 17% 3% 4% 14% 16% 12% <$100K $100-250K $250-500K $500K-$1m >$1m ■% Deferral balance % Total portfolio Bank of Queensland Limited 2020 Full Year Results Presentation DEFERRALS BY PAYMENT TYPE 87% 79% 21% 13% Principal & Interest Interest Only ■% Deferral balance % Total portfolio 50#51HOUSING LOAN DEFERRALS AUGUST 2020 BOQD GROUP . SUMMARY 79% of customers remained on BRP after the 3 month check-in period • 17% of customers withdrew from the BRP at the 3 month check-in On expiry, 43% of customers have recommenced repayments after the payment deferral (of the 4.9% expired as at August) • 52% of customers with expired loan deferrals (as at August), require support beyond the initial 6 month repayment deferral period HOME LOAN DEFERRAL - EXPIRY TERM First term current deferrals, 94.8% C Expired term deferrals, 4.9% Extension term current deferrals, 0.3% HOME LOAN DEFERRAL - CHECK IN OUTCOMES Remain on deferral package, 79% C Seeking relief beyond 6 months, 3% Change to interest only, 1% Cancel relief package, 17% Bank of Queensland Limited 2020 Full Year Results Presentation 51 557#52SME LOAN DEFERRALS AUGUST 2020 BOQD GROUP SUMMARY • 16% of SME customers on BRP as at August Deferral balances continue to reduce since the peak in April • Proactive approach to working with SME customers to understand customer needs and impact • 37% of deferrals relating to medical professionals with dentists representing 46% of deferred loans in the BOQ Specialist deferral portfolio SME DEFERRAL BALANCES RELATING TO PROPERTY, CONSUMER FACING & MEDICAL SEGMENTS Property Property & & Consumer Consumer SME DEFERRALS – BALANCES & ACCOUNT NUMBERS4 25 25 20 20 40% 21 19 20 20 19 30% 15 18% 18% 17% 17% 16% 20% 10 10% 5 2.8 2.8 2.7 2.6 2.5 0 0% Apr-20 May-20 Jun-20 Jul-20 Aug-20 Deferral balances ($bn) Number of accounts deferred (000s). Deferral balance as % of total business lending SME DEFERRALS - BY CHANNEL Total Total ($m) (%) ($m) (3) (%) (3) Property Property Facing (2) Facing (2) Medical Medical Related (1) Related (1) ($m) (%) ($m) (%) 40% 36% 39% Deferral 33% 631 25% 170 7% 936 37% 2,500 69% 25% 27% Portfolio % of Total SME Portfolio 26% 5% 24% 55% BOQ Commercial BOQ Finance BOQ Specialist ■% Deferral balance ■% Portfolio balance Bank of Queensland Limited 2020 Full Year Results Presentation (1) Property & property related includes commercial real estate, property & business services i.e. construction, real estate agents (2) Consumer facing includes retail trade, tourism, hospitality and entertainment (3) Total is the aggregated deferrals from Property & Property Related, Consumer Facing and Medical (4) SME deferral balance percentages are calculated using Commercial and BOQ Finance gross loans and advances 52#53SME LOAN DEFERRALS AUGUST 2020 SUMMARY ⚫ SME BRP portfolio composition broadly consistent with the total SME portfolio SME DEFERRALS BY LOCATION • 37% of BRP deferrals relating to health care industry due to BOQ Specialist deferral portfolio 41% 35% 24% 25% 19% 21% 8% 7% • Loan balances >$500K marginally higher in BRP portfolio in comparison with the total SME portfolio 5% <1% QLD NSW VIC WA NZ ■■% Deferral balance ■% Portfolio balance SME DEFERRALS BY BALANCE SME DEFERRALS BY INDUSTRY BOQD GROUP 9% 6% Other 33% 37% 27% 15% 16% 20% 21% 16% 11% 14% 27% 24% 23% 14% 14% 11% 12% 4% 3% 4% 14% 7% 7% 8% 6% 2% Health Care Property <$100K $100-250K $250-500K ■% Deferral balance $500K-$1m ■% Total portfolio >$1m Construction Professional Services Agriculture Transport 5% 5% Manufacturing Accommodation & Food Services Others ■% Deferral balance ■% of SME portfolio balance Bank of Queensland Limited 2020 Full Year Results Presentation 53#54SME LOAN DEFERRALS – RISK CATEGORISATION AUGUST 2020 RISK CATEGORISATION BY NUMBER OF ACCOUNTS RISK CATEGORISATION BY EXPOSURE 43% 46% 37% 19% 56% 34% 25% 74% 12% 71% 2% 8% 38% 18% 88% 15% 48% LOW RISK 5% Category 1 10% Category 2 33% 10% 11% HIGH RISK LOW RISK ■BOQ Commercial Category 3 BOQF BOQS Category 4 Category 1 • BOQS portfolio expected to outperform due to the flexibility of medical professionals to adjust working hours and pent up demand for elective surgery Bank of Queensland Limited 2020 Full Year Results Presentation BOQD GROUP 46% 10% 10% 23% 4% 15% 59% 29% 62% 37% HIGH RISK Category 2 Category 3 Category 4 ■BOQ Commercial BOQF BOQS • ⚫ 20% of the SME portfolio on deferral are considered 'high-risk' and likely to require support beyond the 4 month extension 54#55SME LOAN DEFERRALS AUGUST 2020 BOQD GROUP SUMMARY • • • 79% of customers remained on BRP for the full 6 months © 12% of customers withdrew from the BRP at the 3 month check-in At the 3 month check-in, more than two thirds of SME customers stated they expected trade to return to normal in the short-term ⚫ On expiry, 26% of customers recommenced repayments after the payment deferral period (of the 4.5% expired as at end of Aug) ⚫ 68% of customers with expired loan deferrals (as at August), require support beyond the initial 6 month repayment deferral period SME LOAN DEFERRAL - EXPIRY TERM First term current deferrals, 94.8% Expired term deferrals, 4.5% Extension term current deferrals, 0.7% SME LOAN DEFERRAL - CHECK IN OUTCOMES Remain on deferral package, 79% C Change to interest only, 1% Cancel relief package, 12% Other, 8% Bank of Queensland Limited 2020 Full Year Results Presentation 55#56PORTFOLIO QUALITY BOQD GROUP#57HOUSING LOAN PORTFOLIO BOQD GROUP SUMMARY . Carefully managed risk levels across housing portfolio, with average LVR of 66% 94% of customers with LVR<90% Increasing geographic diversification outside of QLD HOUSING PORTFOLIO BY LVR 6% 16% ■ Up to and including 60% 34% ■>60% to 70% ■ >70% to 80% ■>80% to 90% 27% ■ >90% 17% HOUSING PORTFOLIO BY STATE 15% 11% 3% 26% ■ QLD ■ NSW & ACT 45% - VIC ■ WA ■ OTHER Bank of Queensland Limited 2020 Full Year Results Presentation HOUSING PORTFOLIO BY CHANNEL 11% 15% ■ Corporate 18% - ОМВ 11% 45% ■ Broker ■ BOQS ■ VMA 57#58ASSET FINANCE PORTFOLIO SUMMARY ⚫ Portfolio is well diversified geographically • Broad industry spread reducing concentration ASSET FINANCE BY INDUSTRY ASSET FINANCE BY STATE 17% 32% ■ QLD 8% ■ NSW & ACT ■ VIC 20% ■ WA OTHER 24% ■Construction ASSET FINANCE BY CHANNEL 18% ■ Transport 39% ■Manufacturing 14% ■ Agriculture 9% ■ Retail Trade 9% 11% Other Bank of Queensland Limited 2020 Full Year Results Presentation 3% 3% 64% 9% 21% BOQD GROUP ■ Equipment Finance ■Structured Finance ■ Dealer Finance ■ Vendor Finance ■ Cash Flow Finance 58#59COMMERCIAL PORTFOLIO SUMMARY • Commercial portfolio well diversified geographically • ⚫ Niche segment strategy driving industry focus in healthcare through BOQS Owner-managers and Business Banking focused on SME lending COMMERCIAL PORTFOLIO BY INDUSTRY 23% ■ Property 29% ■ Health Care ■Construction 6% ■ Professional 7% Accommodation 8% 27% ■ Other Bank of Queensland Limited 2020 Full Year Results Presentation COMMERCIAL PORTFOLIO BY STATE 16% 5% 7% 32% ■ QLD ■ NSW 40% ■ VIC ■ WA Other BOQD GROUP ■Business Banking COMMERCIAL PORTFOLIO BY CHANNEL 1% 2% 15% 51% 0 31% ■ BOQS - ОМВ ■Branch Other 59#60INDUSTRY AND GEOGRAPHIC SPLIT OVERTIME HOUSING LOANS - GEOGRAPHIC SPLIT OVER TIME FY20 Balance Outstanding (%) FY17 Balance Outstanding (%) 45% 50% 24% 15% 11% 5% 21% 14% 12% 3% QLD NSW & ACT VIC WA Other ASSET FINANCE - INDUSTRY SEGMENTS OVER TIME FY20 Balance Outstanding (%) FY17 Balance Outstanding (%) 19% 14% 9% 12% 5% 18% 16% 10% 9% 7% 41% 40% Construction ■Transport Manufacturing Agriculture ■Retail Trade Other COMMERCIAL - INDUSTRY SEGMENTS OVER TIME FY20 Balance Outstanding (%) FY17 Balance Outstanding (%) 29% 26% 28% 8% 7% 6% 22% 26% 8% 8% 7% 26% Property Health Care Construction ■Professional ■Accommodation Other Bank of Queensland Limited 2020 Full Year Results Presentation BOQD GROUP SUMMARY • Enhanced geographic diversification, Queensland portfolio reducing over 3 years from 50% to 45% in FY20 60#61CAPITAL, FUNDING & LIQUIDITY BOQD GROUP#62REPLICATING PORTFOLIO REPLICATING PORTFOLIO AND EQUITY HEDGE (%) 6% SUMMARY The cash rate cuts and associated lower interest rate environment has impacted NIM by 5bps in 2H20 This is due to a 2bps reduction on the replicating portfolio, and an additional 3bps reduction on the uninvested free funding and low cost deposits 4% 2% Bank of Queensland Limited 2020 Full Year Results Presentation 0% Aug-13 3M BBSW Replicating Portfolio Return RBA Official Cash Rate Aug-20 BOQD GROUP Aug 20 Balance $bn 2H20 Avg Return Exit Return Rate Avg term Equity 2.4 1.53% 1.40% 3 yrs Deposit 2.1 1.51% 1.38% 3 yrs Uninvested and 2.6 0.15% 0.13% 3mth free funding 62#63HEDGING COSTS - BASIS RISK SUMMARY The impacts of hedging costs improved NIM by 4bps in 2H20 LONG TERM BASIS RISK AVG - 25BPS 0.5% • Average basis portfolio spreads reduced from 24bps to 17bps during the period Bank of Queensland Limited 2020 Full Year Results Presentation 0.2% тл -0.1% BOQD GROUP Aug-12 Aug-20 63#64FUNDING SUMMARY Funding loan growth with stable sources of funding, including customer deposits and long term wholesale • Growth in deposits contributed to increased deposit to loan ratio and is a result of government initiatives and COVID-19 elevated liquidity DEPOSIT TO LOAN RATIO USES & SOURCES OF FUNDING - FY20 ($BN) REQUIRED FUNDING (0.8) (0.4) FUNDING SOURCES 2.3 (1.1) (3.2) 2.6 BOQD GROUP 74% 70% 69% 69% 0.6 Lending Assets Liquid Assets and other Asset Growth Long Term Wholesale Maturities Long Term Short Term Wholesale Funding Wholesale Funding Issuance And TFF Customer Deposits Other FY17 FY18 FY19 FY20 Bank of Queensland Limited 2020 Full Year Results Presentation 64#65LIQUIDITY BOQD GROUP SUMMARY Strong liquidity with LCR at 164% and NSFR at 119%, well above regulatory targets • Prudent approach to managing liquidity which held us in a good position during the market dislocation in COVID-19 Well positioned to support future growth NSFR MOVEMENT - FY20 119% 112% 0.6% 1.4% 6.7% 119% -0.2% 0.0% -1.3% -0.2% Aug-19 Capital Customer Deposits Wholesale Liquid Assets Residential Other Loans Other Assets Aug-20 Funding & Mortgages Other Liabilities 35% Risk Weight Bank of Queensland Limited 2020 Full Year Results Presentation LCR QUARTERLY AVERAGE - FY20 164% 160% LCR 135% LCR 135% LCR 140% LCR 4.3 3.8 3.8 3.7 3.3 3.2 3.7 4.6 5.2 5.2 5.4 5.6 Nov-19 Feb-20 May-20 Aug-20 ■Net Cash Outflows ■ALA ■ HQLA 65#66TERM FUNDING LONG TERM WHOLESALE FUNDING ($BN) MAJOR MATURITIES ($M)¹ -6% 12.0 11.5 11.3 10.4 0.8 0.8 0.8 0.8 4.6 4.2 3.4 744 150 3.9 820 1.6 0.8 1.7 2.4 700 600 600 600 500 4.9 5.0 4.8 4.0 200 1H19 2H19 1H20 2H20 Senior Unsecured Covered Bonds ■Securitisation Additional Tier 1 Notes / Sub Debt ■RBA Term Funding Facility 811 BOQD GROUP 750 350 600 150 H1 H2 H1 HH H2 H1 H2 H1 H2 H1 HH H2 2021 Senior Unsecured 2022 ■Additional Tier 1 2023 2024 2025 Subordinated Debt Covered Bond ■RBA Term Funding Facility (1) Any transaction issued in a currency other than AUD is shown in the applicable AUD equivalent hedged amount. Senior unsecured maturities greater than or equal to $50 million shown, excludes private placements. Redemption of subordinated debt notes and additional Tier 1 Notes at the scheduled call date is at BOQ's option and is subject to obtaining prior written approval from APRA. An additional approximately 400m from the TFF was drawn in September 2020 and will mature in 1H 2024. Bank of Queensland Limited 2020 Full Year Results Presentation 66#67CREDIT 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. Fitch Ratings has revised the Outlook on BOQ's Long-Term Issuer Default Rating to Negative from Stable on 30th April 2020. Rating Agency S&P Fitch Moody's Bank of Queensland Limited 2020 Full Year Results Presentation Short Term Long Term Outlook A2 BBB+ Stable F2 A- Negative P2 A3 Stable 67#68DIVISIONAL RESULTS BOQD GROUP#69DIVISIONAL PERFORMANCE SOLID UNDERLYING PERFORMANCE ACROSS RETAIL & BOQ BUSINESS BOQD GROUP BOQ Virgin money BOQ BUSINESS BOQ SPECIALIST BOQ FINANCE RETAIL BUSINESS $ million FY20 FY19 FY20 V FY19 FY20 FY19 FY20 v FY19 Net interest income 437 432 1% 543 527 3% Non-interest income 56 63 (11%) ▼ 40 50 (20%) ▼ Total income 493 495 583 577 1% Operating expenses (317) (289) 10% (258) (245) 5% Underlying profit 176 206 (15%) 325 332 (2%) ▼ Loan impairment expense (56) (12) 367% (119) (57) 109% Cash profit before tax 120 194 (38%) 206 275 (25%) Income tax expense (37) (61) (39%) (64) (86) (26%) Cash earnings after tax 83 133 (38%) ▼ 142 189 (25%) ▼ Bank of Queensland Limited 2020 Full Year Results Presentation 69#70RETAIL BANKING OVERVIEW STRONG LENDING GROWTH FOR VMA - IMPROVED PERFORMANCE FOR BOQ BLUE SUMMARY . • VMA continuing to deliver good growth in a maturing portfolio BOQ Blue contracting at a slower rate due to increased acquisition volumes and improving branch productivity • Increased customer deposits by $1.5bn during the year IMPROVED HOME LENDING GROWTH ($M)¹ -248 -216 73 -8 469 445 489 225 (233) (416) (717) (661) SOLID DEPOSIT FUNDING ($BN) BOQD GROUP 1H19 2H19 1H20 2H20 Net Growth VMA BOQ Retail CONTINUED MOMENTUM FOR VMA +10% 15.4 15.8 15.7 17.2 $3BN 1.5 1.5 1.8 1.6 1.5 1.5 2.0 1.6 5.7 6.5 6.8 7.8 6.7 6.3 5.7 5.6 1H19 2H19 1H20 2H20 ■Term Deposits At Call Offsets FY20 lending balance (28% annualised growth rate) ■Transaction Accounts (1) BOQ Retail home lending growth excludes BOQ Business home lending growth Bank of Queensland Limited 2020 Full Year Results Presentation $4M FY20 profit before tax across partnerships (-48% PCP) $471M FY20 credit card receivables (-25% PCP) 70#71BUSINESS BANKING OVERVIEW NICHE SEGMENT STRATEGY DELIVERING BALANCED GROWTH ACROSS BOQB BRANDS SUMMARY • • Solid growth in both the BOQ Commercial and Specialist businesses, through their focus on niche segments Business lending growth slowed in the second half as we supported our customers through the impacts of COVID-19 Increased customer deposits by $1.5bn during the year LENDING GROWTH - BOQ SPECIALIST ($M) 756 130 -20% 7 608 100 626 508 LENDING GROWTH - BUSINESS BANK AND BOQF ($M) -$659m +$240m 237 (3) FY19 FY20 BOQ BUSINESS FY19 BOQD GROUP BOQ SPECIALIST FY20 Commercial Housing & Consumer STRONG GROWTH IN DEPOSITS ($BN) +14% BOQ 9.8 FINANCE 7.8 8.3 8.6 1.0 667 8 FY19 FY20 0.8 0.8 0.9 1.7 1.1 1.2 1.3 4.3 4.8 4.9 5.6 1.6 1.5 1.5 1.5 1H19 2H19 1H20 2H20 Commercial Asset Finance ■Term Deposits Savings & Investments Transaction Accounts Offsets Bank of Queensland Limited 2020 Full Year Results Presentation 71#72ECONOMIC ASSUMPTIONS BOQD GROUP#73MACRO ECONOMIC ENVIRONMENT ECONOMIC ENVIRONMENT IMPROVING, BUT SIGNIFICANT UNCERTAINTY REMAINS BOQD GROUP MACRO ECONOMIC Economy is improving although the recovery is likely to be bumpy with uncertain strength Greatest uncertainty remains the health crisis, and that is unlikely to be resolved until vaccine or effective treatment is found Government and regulatory response has significantly cushioned the decline Balance sheet strength of Government, RBA and the Banks remains a significant positive CONSUMER • • Consumer and business confidence is improving Peak of the unemployment rate likely to be in 2020 Household incomes significantly aided by forthcoming tax cuts, Government programs and interest payment holidays. House price decline has not been as significant as feared, although positive growth not expected until 2H21. Bank of Queensland Limited 2020 Full Year Results Presentation BUSINESS • • . This recession has hit most service sectors hard Government programs have also aided many firms Some business models will not survive the downturn SMEs should benefit from Budget announcements Agribusiness is doing well 73#74DISCLAIMER BOQD GROUP#75ABBREVIATIONS 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 AOFM: Australian Office of Financial Management 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 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 2020 Full Year Results Presentation BOQD GROUP 75#76DISCLAIMER BOQD GROUP IMPORTANT INFORMATION AND DISCLAIMER Summary information This is a presentation of general background information about Bank of Queensland Limited's (BOQ's) activities at the date of this document. It is in summary form and does not purport to be complete. It should be read in conjunction with BOQ's other periodic and continuous disclosure announcements (available at www.asx.com.au). All figures are presented on a cash earnings basis unless otherwise stated. The information contained in this presentation may include information derived from publicly available sources that has not been independently verified. BOQ does not warrant the accuracy, completeness or reliability of the information contained in this presentation or any assumptions on which it is based. This presentation is not financial product advice and should not be relied upon for investment purposes. This presentation does not take into account the investment objectives, financial situation or particular needs of any individual investors. These should be considered, with or without professional advice, before deciding if an investment in BOQ is appropriate. Forward looking statements This presentation may contain forward-looking statements about BOQ's business and operations, strategy, market conditions, results of operations and financial condition, capital adequacy and risk management practices which reflect BOQ's views held and current expectations as at the date of this document. 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. 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. BOQ does not undertake to update any forward-looking statements contained in this document, subject to disclosure requirements applicable to it. There can be no assurance that actual outcomes will not differ materially from these statements. Not an offer 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. Bank of Queensland Limited 2020 Full Year Results Presentation 76