Bendigo maintains margins despite aggressive competitive pricing
(13 February 2006 – Australia) Bendigo Bank has posted a net profit of A$53.2 million for the six months to 31 December 2005, an increase of 18.5 percent on the corresponding period in 2004.
Bendigo managing director Rob Hunt said the bank performed strongly despite extremely aggressive pricing from competitors chasing market share through a combination of low-margin pricing, active retention programs and low-doc lending.
"We refused to be drawn into that ‘volume at any cost’ strategy and instead continued to write solid business at good margins," he said.
"The outcome is profitable growth at reasonable levels, with shareholder returns further aided by the combined effects of excellent deposit flows, steady margins and high-quality assets," Hunt said.
He said Bendigo’s gross margin had "hardly budged" over the past 12 months, saying the bank continued to achieve pricing that reflected the service it provided customers.
Hunt said the bank’s distribution expansion was on track and that it would open 35 new branches and install 80 new ATMs this financial year. He said Bendigo now had more than 8000 Eftpos merchant facilities.
"Our product range is now quite comprehensive and we are able to better support all facets of the communities in which we operate," he said.
Hunt said deposits continued to be strong and lending growth had picked up towards the end of the half.
He said the bank would meet its forecast of cash earnings per ordinary share of at least ten percent this financial year.
"We refused to be drawn into that ‘volume at any cost’ strategy and instead continued to write solid business at good margins," he said.
"The outcome is profitable growth at reasonable levels, with shareholder returns further aided by the combined effects of excellent deposit flows, steady margins and high-quality assets," Hunt said.
He said Bendigo’s gross margin had "hardly budged" over the past 12 months, saying the bank continued to achieve pricing that reflected the service it provided customers.
Hunt said the bank’s distribution expansion was on track and that it would open 35 new branches and install 80 new ATMs this financial year. He said Bendigo now had more than 8000 Eftpos merchant facilities.
"Our product range is now quite comprehensive and we are able to better support all facets of the communities in which we operate," he said.
Hunt said deposits continued to be strong and lending growth had picked up towards the end of the half.
He said the bank would meet its forecast of cash earnings per ordinary share of at least ten percent this financial year.
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