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Bendigo Bank (ASX:BEN) share price rises 4% on solid FY24 profit update

The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price is up around 4% after releasing a FY24 profit update.

Bendigo Bank says it’s Australia’s better big bank, with more than 7,000 staff helping over 2 million customers.

Trading update

Bendigo Bank released a profitability update for the 10 months to 30 April 2024, being FY24 year to date.

It said that unaudited cash earnings after tax for the financial year to date is approximately $464 million, down 2.3% compared to the prior corresponding period in FY23.

The ASX bank share also reported its net interest margin (NIM) after the revenue share arrangements in the year to date was 1.87%. The NIM tells us how much profit a bank is making on its lending, including costs like savings accounts and term deposits.

The year to date NIM before the revenue share arrangements was 2.30% and the NIM in April 2024 was higher than the YTD average.

On the loan portfolio performance side of things, Bendigo Bank said its credit expenses remain at “low levels” across all portfolios.

The business revealed that its residential mortgage lending balance increased from $61.93 billion at 31 December 2023 to $62.27 billion at 31 March 2024. However, total gross credit exposure decreased from $98.5 billion at 31 December 2023 to $97.95 billion at 31 March 2024. That decline was largely due to a reduction of $1.5 billion of loans relating to banks and other deposit taking institutions.

Bendigo Bank commentary

At the FY24 first-half result delivered in February, the business noted its commitment to managing the business for long-term value. It has continued its focus on disciplined growth and prudent management of its costs.

The bank will hold an investor day on 23 May 2024.

Final thoughts on the Bendigo Bank share price

The Bendigo Bank share price is up 20% in the last 12 months. It has recovered from the market weakness caused by competition and worries about borrowers. Due to that higher valuation, I wouldn’t say it’s time to invest in Bendigo Bank shares now.

The solid performance by the bank is admirable. But, profit has declined, so that doesn’t justify a much higher share price, in my opinion. I’d look at other ASX dividend shares for opportunities.

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