Bendigo and Adelaide Bank lifts full-year cash earnings by 9.9 per cent
Bendigo and Adelaide Bank (BEN) today announced an after tax statutory profit of $372.3 million for the 12-months ending 30 June 2014. Underlying cash earnings were $382.3 million, a 9.9 per cent increase on the prior corresponding period1.Cash earnings per share were 91.5 cents, an increase of 7.1 per cent.
The final fully franked dividend of 33 cents2 per share is 2 cents up on the interim dividend, lifting the full-year dividend by 3 cents, to 64 cents per share.
Grants and project funding by local Community Bank® companies increased by 5.5 per cent during the year, to $23.2 million with dividend payments to their shareholders exceeding $6.2 million.
Group Managing Director Mike Hirst said these payments reflected the Bank’s shared value philosophy.
“Our success flows from the investments we make in our customers and communities. There are many stakeholders in our Bank and it’s important they all feel fairly rewarded for the effort they put in,” he said.
“That approach has been consistent for many years. We have a clear focus on our key objectives and we have aligned our investments to achieve those aims.
“We’ve built a great brand in the process and the result we have announced today reflects the opportunities that are coming our way from that. Rural Finance Corporation joining our Group adds significantly to our agribusiness capabilities, although there is no financial contribution from them in this result.
“Like all industry participants, we are alert to the potential for disruption in the market and we are building the flexibility required to compete in a different environment.
“A big piece of that is our investment in achieving advanced accreditation. There is a lot of focus on the increased risk management capability that it will deliver to the Bank, but it’s bigger than that – we’re just as focused
“We announced a number of cutting-edge technologies during the year, with each innovation based on what customers were asking for, or where we saw we could add value for our communities.”
Mr Hirst said the Bank welcomed the interim report of the Financial Services Inquiry. “The inquiry recognises the environment has changed for lots of reasons and they’ve taken a balanced approach in identifying the key issues, including the uneven playing field tilted in favour of larger players. Bendigo looks forward to working with the inquiry towards an appropriate resolution of these issues.”
Comments on the result
Mr Hirst said the profit increase was built on “disciplined management of our margin and the balance sheet”.
“A five basis point increase in net interest margin is testament to the Bank’s value proposition in what is a highly competitive environment. We do not pursue growth for growth’s sake. The bank is proud of its community bank model and the resultant sharing of financial reward to communities, customers and shareholders.”
Mr Hirst said BEN had taken further significant steps to strengthen its capital base and funding capacity. “Our capital raisings were well supported by institutional and retail investors. Investors recognise that our strategy is consistent and focused, and we are intent on growing the business profitably.”
The Managing Director said BEN’s focus on writing quality business was evident in the Group’s credit performance. “We have a few large exposures we have needed to provision, but our arrears are trending downwards. Nevertheless our collective provisions have increased year on year.”
Mr Hirst welcomed the recent settlement (pending court approval) of the Great Southern class action brought against BEN. “We always maintained the Bank’s conduct was appropriate and that we are entitled to be repaid the monies loaned to Great Southern borrowers.”
Full year result webcast:
The full year results presentation will be held today at 10:00am AEST.
Watch the live webcast at http://www.media-server.com/m/p/anq3fkh2
Or view the archived webcast from Tuesday 12 August at www.bendigoadelaide.com.au
1 All results relate to the full year ended 30 June 2014, with all comparisons against “prior corresponding period”. The term “prior corresponding period” refers to the full year ended 30 June 2013.
2 Ex-dividend date for final dividend of 33¢ is 19 August 2014, record date is 21 August 2014, and dividend payment date is 30 September 2014.