Just six weeks into his job as chief executive at Bank of Queensland, George Frazis yesterday delivered a 2018/19 financial report he described as "disappointing".The bank suffered from slowing credit demand, higher regulatory costs and pressure on its margin from lower interest rates.BOQ made a net profit of A$298 million in the year to August - down 11 per cent on the 2017/18 result. Cash earnings were down 14 per cent to $320 million.Net interest income was unchanged at $961 million and non-interest income fell 12 per cent to $128 million. Non-interest income was hit by regulatory impacts on St Andrew's Insurance. It stopped selling consumer credit insurance during the year.Operating expenses rose 4 per cent to $550 million. The bank has a cost-to-income ratio of 53.5 per cent.The loan impairment charge increased 80 per cent to $74 million. Loan impairments were 16 basis points of gross loans and expenses.The net interest margin fell five basis points to 1.93 per cent. Return on equity fell 120 bps to 7.7 per cent (8.3 per cent on a cash basis).The common equity tier 1 capital ratio fell from 9.3 per cent to 9.04 per cent.The bank reduced the dividend by 9 per cent in the second half.Lending grew by $937 million, compared with growth of $1.5 billion in 2017/18.Frazis said the bank needed to change the way it did business. "I'll be working closely with the board and senior executive leadership to develop and overarching strategy," he said.He said that areas needing attention include weak retail banking performance, slow and complex lending processes, high operating costs and the "digital gap between BOQ and peers".A new mobile app and improved internet banking functionality has been developed for BOQ Specialist customers. In the retail bank, a new mobile app and digital banking platform will enter a pilot phase next year.The bank is also working to transform Virgin Money Australia into a digital bank. It expects to migrate transaction and savings accounts to a digital platform over the next 12 months.One bright spot was BOQ Finance, which grew its portfolio 15 per cent to $5.3 billion.