Bank of Queensland (BOQ) denies it's a takeover report

THE head of the Bank of Queensland(BOQ) has rejected speculation that his company is now a takeover target afterit posted the first loss by an Australianbank in two decades. Chief executive Stuart Grimshaw saidthe worst was behind the bank, just days after declaring a $17 million full year loss due to $401 million in costs from unrecoverable loans. Mr Grimshaw deniedthe bank would haveto be taken over at some point. "No I don't think that's the case," he said. "When we recorded a loss in the first half, that was about a $90 million after tax loss, the second half we reported a$70.3 million dollar profit." While the Bank of Queensland was exposed to bad debts in the southeast corridor of Queensland, it still had a great future, Mr Grimshaw told ABC's Inside Business program onSunday. "We believe we haveseen the worst. "It won't be an instantaneous returnto like 2006 bad debt expense levels, but we believe that within the next threeyears we will return to a level similar to that." He said the cost of deposits was increasing. "We've actually beenable to manage both sides of the balance sheet prettywell in what's been avery tough and competitive market." The company shed 100 management roles about four weeks ago after highlighting seven layers of people between the chief executive and customers. "In a small bank that's just way too many," Mr Grimshawsaid. "In Bank of Queensland Finance,and even at the bank, we have a number of people doing roles which could be better shared rather than isolated." Mr Grimshaw confirmed the bank's funding was made up of 59 per cent deposits and 41 per cent wholesale funding. Around 40 per cent of its business was now done outside Queensland, with 29branches in Western Australia, 35 in Victoria and 42 in NSW. He added that the bank was not interested in being afunds manager or a large institutional bank. "We're not going to bank every agri-business in Australia." On Friday BOQ shares closed 11 cents, or 1.5 per cent, higher at$7.38.