The fall in earnings followed a series of one-off issues including a writedown of goodwill, the integration costs following its takeover of ME Bank, remedial actions and restructuring costs.

Investors dumped the stock this morning and its share price slumped 4 per cent.

Despite the fall, the bank’s total income of $1.7 billion was up 5 per cent on 2022, but its margins were down because of increased competition in lending and higher funding costs.

Operating expenses shot up 8 per cent, which it attributed to inflation and wage increases as well as investment in technology. Deposits were also up strongly for the year.

The bank will pay a final dividend of 21 cents a share, fully franked.

BoQ said that as pressure grew in the mortgage market, management decided to moderate growth where economic returns could not be achieved. This resulted in a contraction in mortgage lending.

Managing director Patrick Allaway said the board recognised it had been a tough year for shareholders. Its shares are down 15 per cent on a year ago. Allaway said the company accepted it was accountable for operational risk failings that led to two court-enforceable undertakings.

“Our results reflect the market cycle and the business transformation. We continue to invest through the cycle and traded some performance in full-year 2023 for medium to long-term benefits,” he said.

“We have a high conviction in our strategy and a clear roadmap in place to deliver a stronger, simpler, digitally enabled, low-cost bank with exceptional customer experience.

“We are committed to addressing our challenges head on and our transformation is progressing at pace with key milestones achieved in 2023.”