- ASX 200-listed Bendigo and Adelaide Bank (BEN) flags a 31.7 per cent increase in profits over the six months to the end of 2021 as its customer base continues to grow
- The company declared a 26.5-cent interim dividend, fully franked, as an increase in lending sees cash earnings after tax grow 18.7 per cent to $260.7 million
- Managing Director and CEO Marnie Baker warns that revenue is expected to dip over the second half of the year in the face of margin pressures and tight business lending prices
- Despite this, BEN expects to continue to grow its residential loan book in the near-term and benefit from seasonal growth in the agribusiness sector
- Shares in Bendigo and Adelaide Bank spike 5.4 per cent this afternoon, trading at $9.76 at 2:23 pm AEDT
ASX 200-listed Bendigo and Adelaide Bank (BEN) has flagged a 31.7 per cent increase in profits over the six months to the end of 2021 as its customer base continues to grow.
The profit bump came on the bank of an 18.7 per cent increase to cash earnings after tax to $260.7 million, though the bank flagged a slim fall in net interest margins to 2.09 per cent.
In light of the half-yearly results, BEN has declared a 26.5-cent interim dividend, fully franked. This matches the company’s full-year dividend for the 2021 financial year and comes in three cents higher than last year’s interim dividend of 23.5 cents per share.
BEN Managing Director and CEO Marnie Baker said the bank’s third consecutive half of growth was driven by its commitment to remove complexity for customers and keep costs in check.
“To this point, customer numbers continue to rise, up 3.4 per cent over the half to 2.12 million,” Ms Baker said.
“We maintain the highest net promoter score (NPS) of any Australian listed bank at 29.7, more than 30 points above the industry average which remains in negative territory.
“Our customer base is growing because customers are attracted to our products, service levels and our purpose of feeding into the prosperity of our customers and communities, not off it.”
BEN’s half-yearly results were also driven by an increase in lending, with residential lending up 8.4 per cent and growing for the sixth consecutive half-year.
Nevertheless, Ms Baker warned of softer revenues for the second half of the year as rising margin pressures offset the increase in lending.
Intensifying competition and tight pricing in business lending have been a recent challenge for all big banks, and it seems Bendigo and Adelaide is no exception.
“Challenges in the form of margin compression and non-recurring other income are expected to drive revenue lower in the second half. Costs will need to decline for us to continue driving the cost-to-income ratio lower,” Ms Baker said in a statement to investors.
“Delivering positive jaws remains the intent of our executive team.”
‘Jaws’ are a measure of income versus operating expenses for banks.
Despite the forecast margin and cost pressures, Ms Baker said BEN was expected to continue to grow its residential loan book and to further increase near-term lending growth with the seasonal return of growth in the agribusiness sector.
Shares in Bendigo and Adelaide Bank spiked 4.54 per cent this afternoon, trading at $9.68 at 3:00 pm AEDT. The bank has a $5.5 billion market cap.