Bank of Queensland (ASX: BOQ) saw its shares soaring on Thursday following its revelation that the bank's yearly net earnings surged by five percent on the back of reduced costs and positive outlook for the remaining months of 2010.

The bank said that its net profit in the financial year 2009/10 jumped from $141.1 million to $179.6 million while the company's profit after tax moved up from $177.6 million to $190.7 million in the same period, prompting for a final dividend issue of 26 cents per share, fully franked, en route to a pay out increase of 20 percent by next year.

BoQ managing director David Liddy attributed the encouraging results to the bank's "a strong balance sheet and focused expense discipline," which he stressed contributed to the record profit that was obtained amidst the presence of difficulties in the present economic condition.

Mr Liddy said that due to bad debts that saw record numbers in 2009/10, BoQ profits would further spike this year as he projected that normalised cash net profit would reach a height of up to $250 million by 2010/11.

BoQ said that growth would jump by twice as much this year as its cost to income ratio improved to 45 percent as compared to the 45.8 percent posted in the past financial year.

Mr Liddy said that bank has amply delivered all its commitment to the market despite the challenges it encountered, citing that "we have continued to deliver on our growth strategy, purchasing an insurance business and a vendor finance business to assist us in diversifying our income sources, increase our overall margins, and reduce the capital intensity of our model."

BoQ's deposits were up 1.5 times system while lending saw expansions of up to 2.5 system growth as the bank forecasted that "that investments in collection processes and resources will improve specific portfolio performance."

As of 1222 AEDT on Thursday, Bank of Queensland shares were trading down by 1.04 percent at $10.41 though the shares picked up earlier by 1.3 percent to $10.66 at around 1100 AEDT.