BENDIGO BANK PROFIT DOWN AMID TOUGH COMPETITION AND LOW INTEREST RATES
Written on the 8 August 2016
BENDIGO and Adelaide Bank (ASX:BEN) made a statutory profit of $415.6 million for the 12 months to 30 June, 2016, down 2 per cent on the previous year, it announced today.
The bank was able to deliver a half on half increase of one basis point on its net interest margin, to 2.17 per cent and underlying cash earnings were $439.3 million, up 1.6 per cent on the prior corresponding period.
The low interest rate environment has impacted loan growth in a competitive market, while customers are reducing debt and paying off loans ahead of time.
Retail deposits were up 8 per cent for the year, helping the bank achieve 82 per cent of its funding through retail customers. Total deposit growth was up 7.3 per cent in the second half of FY16.
Managing Director, Mike Hirst, says that with the Basel III common equity tier 1 ratio standing at 8.09 per cent, and total capital at 12.21 per cent, 'we have ample capital to grow our business organically'.
"Our bank's strong capital, funding and credit position means our outlook remains extremely positive. We're targeting flat cost growth for the 2017 financial year and our focus on the success of our customers and strategies to deliver balance sheet growth means our bank continues to be well placed for growth and the challenges ahead."
The bank's final fully franked dividend of 34 cents per share lifts the full-year dividend by 2 cents, to 68 cents per share.
The bad and doubtful debts charge was $44.1 million, down 35 per cent on the previous year.
BEN shares were trading up 2.67 per cent, at $9.990 per share at the time of writing.