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Bendigo net profit hit by provisions

Australia
Uncategorized
Financial Results

(16 February 2009 – Australia) Bendigo and Adelaide bank has revealed a net profit for the half year hit by commercial property lending, but cash profit up a strong 42.4 percent.The results by Bendigo and Adelaide Bank for the last six months of 2008 have been restated to allow for the acquisition of Adelaide Bank by Bendigo Bank.

Cash earnings went from $85.8 million in 2007 to $122.2 million for the six months to the end of 2008, representing a large increase of 42.4 percent.

The bank reported net profit before significant items up 56.1 percent to $118.8 million; however was hit hard by a rise in significant items for the half year.

Taking into account significant items that totalled $58.3 million, Bendigo’s net profit actually fell by 27 percent to $60.5 million.

These items included Cash flow hedge reserve movements worth $43.7 million and merger integration costs of $13.8 million, but were also buoyed by more than $5 million in proceeds from the VISA share sale.

Total provisions and reserves for doubtful debts grew to $156.9 million, an increase of $21.8 million since June 2008.

A large proportion of the increase in total provisions is due to specific provisions of $24.4m in the Business Lending portfolio and specifically for four individual property development loans.

Property development loans, however, represent just 0.9 percent of the total loan book of the bank.

The bank also announced an unchanged interim dividend of 28 cents per share.

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