Bank of Queensland cuts annual margin forecast

(Reuters) - Australia's Bank of Queensland Ltd said on Tuesday its net interest margin for fiscal 2022 would be lower than its previous forecast due to record low interest rates, yield curve volatility and stiff competition.

The lender said the industry had seen headwinds to net interest margin, a key measure of a bank's profitability, in the first quarter, partly due to the Reserve Bank of Australia abandoning an ultra-low target for bond yields last month.

That, along with price competition and increased fixed rate lending, means Bank of Queensland's net interest margin will be lower than expected. In October, the lender had forecast a 5 basis points to 7 basis points decline in margins.

The bank, however, said its expenses would be about 1% lower for the year, compared with its earlier forecast of a 3% rise on an underlying basis, as it focuses on cutting costs.

Australia's "big four" lenders have already warned of margin pressure after record low rates spurred a boom in mortgage lending and intensified competition.

(Reporting by Harshita Swaminathan)