Bendigo and Adelaide Bank will pay a steady final dividend of 35 cents a share (for a steady full-year payout of 70 cents) after revealing a weak 6.6% slide in cash earnings to $415.7 million for the year to June.
Bendigo and Adelaide Bank is getting out of financial advice by selling its business in this sector to IOOF (itself a challenged operator in financial advice and funds management) for $3 million dollars.
Given regional banks have a greater proportional exposure to mortgages in their lending than the majors and are not subject to the government levy, Macquarie calculates the belated move to reprice investor/interest-only mortgages will provide a significant near term earnings tailwind.
Bendelaide’s result came in 2% above consensus thanks to a Homesafe house price mark to market, but take that out and it missed by 3%. The bank’s decision to hike its mortgage rates to above the majors has improved net interest margins but slowed down demand, the broker notes.