Bendigo and Adelaide Bank Ltd (ASX: BEN) released its 2018 full year financial results to the market today revealing a financial dividend of 35 cents per share, fully franked.
Here are the highlights from the regional bank’s results:
- Revenue rose 2% to $1.64 billion
- A profit of $434 million was reported, up 1%
- Full year dividends of 70 cents per share fully franked (click here to learn what franking means), up from 68 cents
- Provisions for bad debts rose 9%
- Bendigo Bank’s capital buffer or CET-1 ratio was 8.6%
Commenting on the results, Managing Director Marnie Baker said, “While all lending markets remain highly competitive, particularly lending to owner occupiers, we have seen solid earnings growth across the Local (6.4%) and Partner (21.8%) segments.”
As we noted in this article, rising US interest rates and slower growth in house prices has dampened enthusiasm in the housing market and made some investors caution the outlook for the banking sector because it could squeeze lending margins.
However, Baker notes that Bendigo Bank’s funding position is strong. “We continue to consistently lead the industry with a strong funding position, which provides flexibility to fund organic and inorganic asset growth.”
During 2018 Bendigo Bank widened its all-important net interest margin, the difference between funding costs and interest rates on loans, to 2.36%. The bank said better prices on its deposits and lending helped widen the margin.
Looking towards the future Ms Baker said her bank will continue its focus on people and partners.
“Our proposition is strong; our customer focus, high trust ratings and customer advocacy, provide a great platform for business growth,” Baker said.
Since April 2018, Bendigo Bank shares have traded from around $10 to their current price of $11.43, according to Google Finance.
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