Bendigo profit doubles
February 14, 2010
Bendigo and Adelaide Bank Limited (BEN) reported a net profit of $104.1 million for the six months to 31 December 2009, 105.7% above the previous corresponding period (“pcp”). The regional bank said it was cautiously optimistic about future financial performance and that asset growth would continue to be dictated by broader economic conditions.
Meanwhile, the company’s NPAT before significant items of $134.2 million for the first half was up 23.2% on the pcp.
Bendigo and Adelaide Bank said cash earnings per share of 41.2c was back to pre-GFC levels, while its net interest margin recovered as forecast from 1.66% to 2.09% with the adverse effect of term deposits raised in a rapidly falling interest rate environment of the prior year having worked through the business.
On a run-rate basis net interest margin reached 2.27% in December 2009, which the company said is expected o be maintained at about these levels into the next reporting period.
Managing director, Mike Hirst, said the company’s decision to de-risk the balance sheet and prepare itself for a period of market dislocation paid dividends over the period.
“Our ability to compete for retail deposits on the basis of customer service and value has provided the company with an effective and affordable funding source,” Mr Hirst said.
“This, combined with emerging opportunities in the wholesale and securitisation funding markets, should provide our shareholders with continued reason for optimism.”
Mr Hirst said credit quality remained excellent across the majority of the bank’s loan portfolio.
“The fundamentals for each of our businesses remain sound, with solid growth prospects for our retail, wealth and third party businesses,” Mr Hirst said.
Bendigo and Adelaide Bank said forecasts of an increasing official cash rate are expected to assist margin expansion.
”However this will be offset by continued strong competition for retail deposits – and retail term deposits in particular,” the company said.
“Despite this competition, the Bank continues to roll more than 80% of term deposits at maturity, and has grown its retail funding base over the reporting period.
Bendigo and Adelaide Bank said Tier One capital is 8.27% and Total Capital is 11.97%.
”These capital levels allow for significant flexibility as economic conditions improve, and will trend towards the Board’s target ratio of 7 to 7.5 per cent (Tier One),” the company said.Bendigo and Adelaide Bank’s directors announced an interim dividend of 28c per share.
At the close of trade Friday, Bendigo and Adelaide Bank shares were trading at $9.90.
Meanwhile, the company’s NPAT before significant items of $134.2 million for the first half was up 23.2% on the pcp.
Bendigo and Adelaide Bank said cash earnings per share of 41.2c was back to pre-GFC levels, while its net interest margin recovered as forecast from 1.66% to 2.09% with the adverse effect of term deposits raised in a rapidly falling interest rate environment of the prior year having worked through the business.
On a run-rate basis net interest margin reached 2.27% in December 2009, which the company said is expected o be maintained at about these levels into the next reporting period.
Managing director, Mike Hirst, said the company’s decision to de-risk the balance sheet and prepare itself for a period of market dislocation paid dividends over the period.
“Our ability to compete for retail deposits on the basis of customer service and value has provided the company with an effective and affordable funding source,” Mr Hirst said.
“This, combined with emerging opportunities in the wholesale and securitisation funding markets, should provide our shareholders with continued reason for optimism.”
Mr Hirst said credit quality remained excellent across the majority of the bank’s loan portfolio.
“The fundamentals for each of our businesses remain sound, with solid growth prospects for our retail, wealth and third party businesses,” Mr Hirst said.
Bendigo and Adelaide Bank said forecasts of an increasing official cash rate are expected to assist margin expansion.
”However this will be offset by continued strong competition for retail deposits – and retail term deposits in particular,” the company said.
“Despite this competition, the Bank continues to roll more than 80% of term deposits at maturity, and has grown its retail funding base over the reporting period.
Bendigo and Adelaide Bank said Tier One capital is 8.27% and Total Capital is 11.97%.
”These capital levels allow for significant flexibility as economic conditions improve, and will trend towards the Board’s target ratio of 7 to 7.5 per cent (Tier One),” the company said.Bendigo and Adelaide Bank’s directors announced an interim dividend of 28c per share.
At the close of trade Friday, Bendigo and Adelaide Bank shares were trading at $9.90.
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