The Bank of Queensland Ltd (ASX: BOQ) share price is currently down more than 30% since October 2021. However, 2024 saw a bit of a recovery for the ASX bank share — it rose by 10% compared to an increase of around 7.5% for the S&P/ASX 200 Index (ASX: XJO).

As the above chart shows, BOQ has been climbing since October 2023. It's an interesting outcome considering the bank's challenging operating environment.

There are many different players in the banking sector, including Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), ANZ Group Holdings Ltd (ASX: ANZ), and Macquarie Group Ltd (ASX: MQG), all vying for market share.

The level of competition for loans and deposits is a headwind for the profit margins of every business involved, including Bank of Queensland. The bank's FY24 result, reported in October, highlighted its profitability struggles.

FY24 earnings recap

For the 12 months to 31 August 2024, BOQ reported that its cash earnings sank 24% to $343 million.

Its financials were impacted by both higher expenses and a lower net interest margin (NIM).

Cash operating expenses increased 6% year over year to $1.07 billion due to inflation and continued investment in transformation, technology, risk and compliance.

The NIM — the margin on the bank's lending compared to its funding cost (such as term deposits) — declined 13 basis points (0.13%) to 1.56%. BOQ noted pressure in the home lending market persisted throughout the year and that there was strong competition for deposits as well as higher wholesale funding costs.

Positive outlook for Bank of Queensland shares?

While the FY24 result wasn't great, the company had a number of positive things to say about its outlook.

BOQ said it "remains optimistic on the long-term view" and suggested the "Australian economy is likely to improve in the coming financial year, however, the strength of the improvement is uncertain."

The ASX bank stock pointed to supportive factors such as "a resilient labour market, fiscal support and declining global, and potentially domestic, cash rates."

It also said it anticipates "stable margins and revenue benefits from business bank growth in specialist areas and branch conversion, partially offset by further reductions in mortgage balances."

Finally, BOQ highlighted it's expecting "broadly flat" expense growth as simplification initiatives offset inflation.

With the Bank of Queensland share price finishing the year 10% higher, investors may be feeling more positive about the future than they were at the start of 2024.