The Bank of Queensland Ltd (ASX: BOQ) share price has risen more than 10% since 26 June, as we can see on the chart below.
In fact, all the big ASX bank shares — Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), ANZ Group Holdings Ltd (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB) — have lifted in the last week as well.
After a strong rise during July, can BOQ shares achieve another good month in August?
Eyes on reporting season
We're entering reporting season for many ASX shares that have financial periods that end in June. There are plenty of things to look out for.
Bank of Queensland doesn't actually report its earnings in August because of a different reporting schedule.
But, investors may still react during reporting season as other ASX bank shares release their earnings results, including the Commonwealth Bank and Bendigo and Adelaide Bank Ltd (ASX: BEN).
If BOQ's peers report that competition is still strong or intensifying and it appears the net interest margin (NIM) will remain under pressure, that could mean trouble for the Bank of Queensland share price.
CBA and Bendigo Bank could also advise that arrears are rising following the interest rate rises. That could also bring clouds to loom over the BOQ share price in August.
Risk-weighted assets
In its last update, BOQ advised its total on-balance sheet and off-balance sheet exposure was $38.15 billion in May 2023, down from $38.34 billion in February.
This was largely caused by residential mortgages falling from $23.16 billion to $22.86 billion in May 2023.
Considering mortgages are the main portion of its lending, that could be seen as discouraging for future lending income if its market share is dropping.
The chair acknowledged in a letter to shareholders that the ASX bank share has been focused on protecting shareholder value and "did not actively participate in a market where mortgages were being written below the cost of capital".
Shareholders can only hope that the loan market starts focusing more on profitability.
Bank of Queensland share price valuation
According to Commsec, the ASX bank share is now valued at around 10x FY24's estimated earnings. It could easily trade at a forward price/earnings (p/e) ratio of 11x, as that's still quite low, so a rise of 10% is possible. But a rise could take a month, a year or even longer.
