Bendigo and Adelaide Bank yesterday announced its 2010 first half result. Key points of the result follow:
* Net profit after tax was $104.1m, a 106% increase on the $50.6m reported for the prior corresponding period and more than triple the $33.2m from June 2009. Cash earnings, a more relevant record of banking profitability was up 24% to $139.7m.
* Net interest margin increased from 1.67% to 2.09% in large part due to a repricing of the bank‘s term deposit book.
* The cost to income ratio was down to 57.7% from 63.7% at June 2009 and the bank is working towards a target of 55.0%.
* Retail funding accounts for 68% of the bank‘s liability base with securitisation at 19%, term debt at 1% and wholesale funding 12%.
* Provisions for bad and doubtful debts increased from $198.1m to $220.3m although $13.3m of this increase was acquired through the business combination with Rural Bank. Overall, provisioning and arrears remain stable.
* The bank‘s Tier 1 capital increased to 8.95% from 7.43% mainly due to a $300m capital raising in August/September 2009. The total capital ratio increased to 11.97% although the amount of Tier 2 capital decreased as the bank‘s subordinated debt issues were redeemed without being replaced.
Overall it was a strong performance from Bendigo with profitability returning to more normal levels on the back on an increased net interest margin and moderating bad debts. When combined with the substantial capital raising undertaken in the last 6 months, Bendigo remains a soundly capitalised bank and we are comfortable with the credit risk.
for more details visit our website :
http://www.termdeposit.com/