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Bendigo and Adelaide Bank profit dives 48 per cent

Business

Bendigo and Adelaide Bank has halved its profits and deferred a decision on its final dividend.

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Australia’s fifth-largest retail bank announced its 2019/20 full-year results this morning, citing low interest rates and COVID-19 for the poor figures.

Statutory net profit was down 48.8 per cent to $192.8 million while cash earnings after tax were $301.7 million, down 27.4 per cent.

However, total income on a cash basis was up 0.9 per cent to $1.61 billion, total lending was up 5.1 per cent to $65.3 billion and total deposits up 5.7 per cent to $67.7 billion.

Managing director and CEO Marnie Baker said the bank’s priority this year was to support those impacted by COVID-19, bushfires, floods and prolonged drought through a range measures “to feed into prosperity, not off it”.

“Last year, we announced our multi-year strategy to reduce complexity, invest in capability and tell our story to reshape our business for the future and deliver our vision,” she said.

“We know we must constantly evolve because our customers’ needs and the environment continue to change.

“Whilst the events of 2020 haven’t changed our strategy, the ongoing economic uncertainty has accelerated our need to transform.

“Our full-year result has been impacted by COVID-19, record low interest rates and investment costs required to support the delivery of our strategy.”

Agribusiness lending was up 1.3 per cent despite challenges to Australian agriculture such as ongoing drought and summer bushfires.

But bad and doubtful debts reached $168.5 million and were influenced strongly by a COVID-19 collective provision of $127.7 million.

Bendigo and Adelaide Bank chair Jacqueline Hey said the board had decided to defer a final dividend decision.

“Whilst economic uncertainty remains and the full impact of COVID-19 is still evolving, the Board has acted prudently in considering the interests of shareholders and APRA’s industry guidance on capital management, to defer a final dividend decision,” she said.

The company’s share price was $11.50 at the start of August last year but fell during the early weeks of the coronavirus pandemic to bottom out at $5.47 on March 24.

It has recovered somewhat since and began trading today at $7 with a market capitalisation of $3.72 billion.

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