Bendigo eyes up more acquisitions even after profit fall
(21 August 2012 – Australia) Bendigo and Adelaide Bank reported a 43 percent fall in profit to A$195 million, citing write-downs on its margin lending business impacting during the first half.
Bendigo managing director Mike Hirst said the regional bank remained on the lookout for further acquisitions opportunities despite the fall.
After stripping out one-off charges, cash profit was down 3.9 percent to A$323 million.
At its peak, Bendigo's margin-lending book was in excess of A$3.7 billion, today it is closer to A$2.3 billion.
This prompted a A$95 million write-down on its margin lending operations and wealth management division during the first half.
Hirst said all banks had been feeling pressure from global uncertainty. ''It's a low-growth environment, so the focus has been around maintaining margin and cost management.''
The increase in the cost of raising deposits was reflected in the bank's net interest margin, which was down 7 basis points over the year to 2.1 percent.
Bendigo increased its overall lending book 4.5 percent in the year to 30 June to A$50 billion. Its deposit growth of 11 percent to A$40.7 billion outpaced the broader market.
Bendigo has just bought the local arm of Bank of Cyprus for A$130 million, a move analysts have questioned.
Analysts believe the deal in late 2007 to buy regional rival Adelaide Bank for A$1.57 billion and the later move on Macquarie Group's A$1.5 billion margin lending portfolio have both experienced a structural shift in the market since the financial crisis.
After stripping out one-off charges, cash profit was down 3.9 percent to A$323 million.
At its peak, Bendigo's margin-lending book was in excess of A$3.7 billion, today it is closer to A$2.3 billion.
This prompted a A$95 million write-down on its margin lending operations and wealth management division during the first half.
Hirst said all banks had been feeling pressure from global uncertainty. ''It's a low-growth environment, so the focus has been around maintaining margin and cost management.''
The increase in the cost of raising deposits was reflected in the bank's net interest margin, which was down 7 basis points over the year to 2.1 percent.
Bendigo increased its overall lending book 4.5 percent in the year to 30 June to A$50 billion. Its deposit growth of 11 percent to A$40.7 billion outpaced the broader market.
Bendigo has just bought the local arm of Bank of Cyprus for A$130 million, a move analysts have questioned.
Analysts believe the deal in late 2007 to buy regional rival Adelaide Bank for A$1.57 billion and the later move on Macquarie Group's A$1.5 billion margin lending portfolio have both experienced a structural shift in the market since the financial crisis.
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