The Bank of Queensland Ltd (ASX: BOQ) share price has dipped 8% since 18 October 2024, while the S&P/ASX 200 Index (ASX: XJO) has only fallen by approximately 2% in that time.

BOQ shares initially jumped when investors saw the FY24 result, sending it higher to $7. But, investors seem to have lost some of their excitement about the bank.

With how much the BOQ share price has moved over the past year, it's worth asking if the ASX bank share is now an opportunity or overpriced.

Let's remind ourselves what was revealed in the result and then I'll look at if the bank is good value.

FY24 report

In October 2024, the challenger bank reported that its cash earnings after tax declined 24% to $343 million.

Both its revenue and expenses were challenged. The net interest margin (NIM), a measure of how profitable a bank's lending is, declined by 13 basis points (0.13%) over FY24 to 1.56%. Cash operating expenses increased 6% to $1.07 billion.  

Lending growth was mixed for the bank. Housing lending declined by 2%, or $944 million, but business lending increased by 2%, or $323 million.

BOQ said it was operating in a "highly competitive environment", which hurt its lending and NIM. Expenses increased due to inflation and investments in transformation, technology, risk, and compliance.

The bank said that as pressures in the home lending market persisted through the year, management made the decision to 'recycle' lower-returning home lending capital, shifting the portfolio mix to higher returning assets.

Customer deposit balances increased 1% year over year, thanks to an increase of $1.5 billion in digital deposits.

Thankfully, the bank said its portfolio quality is "sound with low loan impairment expense and prudent provisioning." In other words, its borrowers are still doing okay overall, which I think is imperative for the BOQ share price.

In terms of the outlook, the bank said it "remains optimistic on the long-term view" with expectations the Australian economy is "likely to improve" in the coming financial year, though the size of that improvement is uncertain.

Positives include a resilient labour market, fiscal support and declining interest rates.

But, BOQ also pointed to uncertainty due to the global outlook, low productivity, and increasing consumer and business caution.

It's expecting stable profit margins and revenue benefits from business bank growth in specialist areas and branch conversion, partially offset by further reductions in mortgage balances.

The dividend payout ratio target range will remain between 60% to 75%.

Are BOQ shares a buy?

According to the Commsec forecast, BOQ is forecast to generate a very similar profit in FY25 as in FY24. The earnings per share (EPS) is projected to be 52.7 cents. This puts the BOQ share price at just over 12x forward earnings.

This price-earnings (P/E) ratio is comparable to other banks. For example, the ANZ Group Holdings Ltd (ASX: ANZ) share price is valued at just over 12x FY25's estimated earnings too, while the Westpac Banking Corp (ASX: WBC) share price is valued at 14.5x FY25's estimated earnings.

It's positive to see that BOQ is expecting to maintain its profitability in FY25, but profit could drop if arrears keep rising and competition in the sector remains high.

BOQ may be able to grow profit. The forecast on Commsec suggests the BOQ EPS could rise 27% in FY26. However, the bank lacks the scale advantages that ANZ, Westpac, Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd (ASX: NAB) have.

BOQ could be a candidate for a shorter-term bounce if its earnings can jump in FY26. However, I wouldn't commit to owning it for the long term – the competitive challenges don't appear to be diminishing, which could continue harming BOQ's NIM and/or lending growth.