The Bank of Queensland Ltd (ASX: BOQ) share price trounced the benchmark index in July.
On 30 June, shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed trading for $5.49. The closing bell on 31 July saw those same shares changing hands for $6.04 apiece.
That put the Bank of Queensland share price up 10% over the month.
That’s more than three times the 2.9% gains posted by the ASX 200.
So, why were investors snapping up the bank stock in July?
What spurred the Bank of Queensland share price in July?
There was no price-sensitive news from the bank last month.
However, there are a number of factors that look to have boosted the Bank of Queensland share price.
First, ASX 200 bank shares as a whole outperformed over the month. The big banks have been easing off on last year’s fierce mortgage competition and raising their interest rates by more than the RBA this year. That’s improved the outlook for profit margins in the industry.
Indeed, July saw the S&P/ASX 200 Financials Index (ASX: XFJ) gain 4.9%.
Still, the Bank of Queensland share price gained twice that much.
Why?
I suspect for two reasons.
Number one, the bank had a bit of a horror year going into July, with shares down more than 19% in the calendar year. But management has been hard at work to turn that around. That includes seeing BOQ undertake an integrated risk program to “strengthen its commitment to risk management”.
Judging by the big boost over the month, investors look to have taken note and done some bargain hunting.
The second reason the Bank of Queensland outperformed the broader financial sector could well be the bank’s juicy forecast dividend yield for FY 2024.
On 13 July, BOQ had the highest forecast yield of any of the ASX 200 bank shares, according to various broker data.
Going by the banks’ share prices on the day, the Bank of Queensland had a forecast, fully franked yield for the financial year ahead of 7.4%.
I suspect that drew the attention of income investors and helped buoy the Bank of Queensland share price.
