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REPORTING SEASON:Bendigo and Adelaide Bank Limited (BEN)

Brought to you by CommSec

 

Figure 1: Bendigo and Adelaide Bank Limited 12 month chart

 

Australia’s fifth biggest bank, Bendigo and Adelaide Bank (BEN), posted a slightly worse than forecast fall in half year net profit to $180.7m.

Managing Director Mike Hirst blamed the slip in earnings on low growth.

This was driven by subdued demand and a jump in customers paying down debt. Cash earnings however (which strip out one-off items) rose 9.5% to $185.9m.

Lower funding costs, particularly for term deposits (which account for 70% of BEN’s deposit book) helped lift margins.

Net Interest Income (difference between revenue generated from loan repayments and interest payments made to customers on deposits) rose 8.7% to $551.5m.

Low interest rates have made residential housing more enticing to home buyers; pushing new loan approvals up 13.5%.

Residential mortgages now make up 69.2% of its loan portfolio; 4.2% higher than in 2012.

BEN’s revenue contribution from its Homesafe business doubled over the half. Home safe allows seniors to receive cash now for selling part of the future sale proceeds of their homes. Looking ahead, BEN

expects little change in operating conditions for the remainder of 2014.

Fitch and S&P (ratings agencies) upgraded BEN in recent months.

A fully franked $0.31 per share interim dividend was declared; payable to eligible investors on 31 Mar (21 Feb ex-dividend date)

 

You can see all of CommSec’s reporting season analysis by clicking here.

Steven Daghlian, Market Analyst,