Bendigo and Adelaide Bank lifts profit amid Great Southern fallout
Bendigo and Adelaide Bank has reported a healthy 23.2 per cent improvement in after-tax profit to $134.2 million for the six months to 31 December, delivering investors an interim dividend of 28 cents a share.
The banking group’s managing director, Mike Hirst, attributed the improved performance to what he described as a strong, low-risk balance sheet.
However, the bank acknowledged its exposure to the Managed Investment Scheme Great Southern, and said it was continuing to work through the issues relating to its portfolio of loans to investors.
“Total arrears have remained relatively steady since August, 2009, and the Bank has recently initiated court action against the first of its defaulting customers,” the bank’s announcement to the Australian Securities Exchange said. “The Bank has repeated its intention to use all of its rights under the terms and conditions of the loan contracts to recover the money owed to it.”
The announcement added that while the bank had continued to seek repayment from defaulting customers, it had also maintained its efforts to help ensure any existing value in the scheme was preserved and increased.
Looking at its wealth businesses, the banking group said that Sandhurst Trustees and Adelaide Managed funds were expected to take advantage of improving market fundamentals.
“Rationalisation and consolidation of the industry, along with potential benefits from planned regulatory and legislative changes, are likely to provide long-term benefits to the sector,” the bank’s announcement said.
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