Mr Frazis, a former senior Westpac executive who is trying to improve BoQ’s poor financial performance, said the capital it was raising would give the bank greater flexibility to implement its “transformation.”
The changes flagged by Mr Frazis include cutting costs, slashing the number of products, improving its technology and simplifying the “onerous” process for getting a mortgage.
“There will be a re-basing of our cost base, so the objective is to get some costs out, to improve productivity and ultimately improve our cost-to-income ratio,” Mr Frazis said.
Mr Frazis, who previously ran retail banking at Westpac, declined to comment on the money-laundering scandal affecting the country’s second largest bank, saying the matter had nothing to do with the business he was running at the time.
Evans and Partners analyst Matthew Wilson said the timing of BoQ’s capital raising looked “opportunistic given events elsewhere in the sector,” while pointing out the raising was occurring before BoQ provides investors with more detail at a strategy day in February.
“We believe, investors should be given the opportunity to examine the new strategic detail and assess the probability of execution success before allocating more capital,” wrote Mr Wilson, who has a “negative” recommendation on the stock.
BoQ last month posted a weak profit result and warned of a soft outlook for the year ahead, a view it reaffirmed on Monday.