Dividend Update Signals No DRP Discount, Raising Questions on Shareholder Engagement
Bank of Queensland Limited has updated its dividend distribution details for the six months ending February 2025, confirming a fully franked dividend and revising the Dividend Reinvestment Plan price and NZD exchange rate.
- Ordinary fully franked dividend of AUD 0.18 per share
- Dividend payable on 23 May 2025
- DRP price set at AUD 7.5635 with no discount
- NZD exchange rate updated to 1.0786
- DRP participation approximately 8.68%
Dividend Update Overview
Bank of Queensland Limited (ASX: BOQ) has issued an update to its previously announced dividend distribution for the six-month period ending 28 February 2025. The bank confirmed an ordinary dividend of 18 cents per share, fully franked at the corporate tax rate of 30%, payable on 23 May 2025. This update refines key details around the Dividend Reinvestment Plan (DRP) pricing and the New Zealand dollar exchange rate used for currency conversions.
Dividend Reinvestment Plan Details
The DRP price has been set at AUD 7.5635 per share, calculated as the arithmetic average of the daily volume weighted average price over a 10-trading day period starting two days after the record date, with no discount applied. This means shareholders opting to reinvest their dividends will acquire shares at a price reflecting recent market activity, without any incentive discount. Participation in the DRP currently stands at approximately 8.68% of the bank’s ordinary fully paid shares, indicating a modest but meaningful level of shareholder engagement with the reinvestment option.
Currency Options and Exchange Rate Update
Bank of Queensland offers dividend payments in Australian dollars by default, but shareholders can elect to receive payments in New Zealand dollars, reflecting the bank’s cross-border shareholder base. The updated exchange rate for NZD payments is 1.0786, which will be applied to convert the dividend amount for New Zealand-based investors. Shareholders have until 2 May 2025 to elect their preferred currency, with detailed instructions available on the bank’s Shareholder Centre website.
Implications for Investors
This update provides clarity on the exact terms of the dividend payment and reinvestment options, allowing investors to make informed decisions ahead of the payment date. The fully franked nature of the dividend enhances its attractiveness by offering tax credits to Australian shareholders. Meanwhile, the absence of a DRP discount suggests the bank is aligning reinvestment pricing closely with market valuations, which may influence shareholder participation rates going forward.
Overall, the announcement reflects Bank of Queensland’s steady approach to shareholder returns and currency management, maintaining transparency and flexibility for its investor base across Australia and New Zealand.
Bottom Line?
As Bank of Queensland finalises its dividend terms, investor choices on reinvestment and currency will shape the next phase of shareholder returns.
Questions in the middle?
- Will DRP participation increase if a discount is introduced in future dividends?
- How might fluctuations in the NZD exchange rate impact New Zealand-based shareholders’ returns?
- What are the broader implications of a fully franked dividend in the current Australian tax environment?
