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Bendigo Bank profit up 80 per cent

Aug 19, 2013

Bendigo and Adelaide Bank has boosted its full year net profit by 80 per cent to $352.3 million.

The bank’s underlying cash profit was $348 million, an increase of 7.7 per cent on the previous corresponding period.

Last year’s net profit was reduced by a $95 million writedown on its margin lending operations and wealth management division.

The company this year has increased its final dividend by 3.3 per cent to 31 cents per share.

The bank said on Monday its net interest margins, a measure of the profit it makes on loans, came under pressure from vigorous competition for retail deposits and compression caused by low official cash rates.

But it still increased its net interest margin to 2.21 per cent, up 10 basis points on the prior corresponding period, due to lower wholesale funding costs.

Bendigo and Adelaide Bank managing director Mike Hirst said the bank had produced a solid result in difficult trading conditions.

“Consumer confidence and demand for credit remains low, and competition remains very strong for retail deposits,” he said.

Historically low interest rates were providing comfort to existing borrowers, but the full effects of recent cash rate reductions were yet to be reflected in a broad return of consumer confidence, he said.

“While we expect to see relatively subdued credit growth in the coming 12 months, we remain confident that the unique Bendigo and Adelaide Bank business model will continue to resonate with customers.”

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