Half-year results from Bendigo and Adelaide Bank (ASX:BEN)
showed its net profit rose while its net interest margin fell for the 6 months ending December last year.
Despite this, the nation’s fifth largest bank is set to reward shareholders with a dividend. The bank’s net profit jumped 31.7 per cent to $321.1 million while its net interest margin declined 14 basis points to 2.09 per cent. The group has flagged lower revenue for the second half.
Bendigo said its net interest margin was impacted by an increase in its liquidity position, competition across most lending categories and continued consumer preference for fixed rate loans. The bank’s total lending rose 2.1 per cent and customer deposits rose by 6.6 per cent.
“Throughout the pandemic we acted fast and sensitively to be there for our customers, providing loan repayment deferrals, fee waivers and other measures of support including extensions. We helped around 25,000 customers with only 3.5 per cent of those requiring ongoing support today,” said chief executive officer Marnie Baker.
“Challenges in the form of margin compression and non-recurring other income are expected to drive revenue lower in the second half. Costs will need to decline for us to continue driving the cost-to-income ratio lower. Delivering positive jaws remains the intent of our executive team.”
The board has declared a dividend of 26.5 cents per share.
Shares in Bendigo and Adelaide Bank (ASX:BEN)
are trading 2.5 per cent higher at $9.49.