REPORTING SEASON: Bendigo & Adelaide Bank (BEN)

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Figure 1: Bendigo & Adelaide Bank 12 month chart

 

Bendigo and Adelaide Bank (BEN) earnings up 13% but numbers did not impress.

– Bendigo and Adelaide Bank (BEN) posted a 13.1% lift in FY earnings and a 14% lift in net profit after tax. The BEN result was disappointing as the regional bank’s cash profit, especially in the last 6 months of the FY15 were below market expectations. Over the year BEN saw a strong build in business and rural revenues (Rural Finance Corporation joined the group and as a result has significantly increased the depth of BEN’s agribusiness offering) but profits from its wealth unit fell.

– Expenses were down as the firm continued to focus on efficiencies but its bad debts were up from $30M in 1H15 to $38m in 2H15. BEN’s Net Interest Margin (NIM) fell in the second half of the year and fell 4bp over the year, reflecting the competitive lending environment and the 50bp cut to the cash rate by the RBA in 2H15. The increase in 2H15 BDD expense was primarily driven by the $15.9M collective provision for Great Southern (a class action agreement approved by the Supreme Court of Victoria).

– The July 2015 APRA announcements on changes to risk weights on mortgages has positively impacted the competitive environment. BENs Tier 1 funding lifted by 15bps to 8.17%.

– BEN will pay out a final dividend of $0.33 on Wednesday September 30, 2015.

 

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

Juliana Roadley, Market Analyst,