Bendigo and Adelaide Bank boosts margin lending
Bendigo and Adelaide Bank has announced its intention to boost investment into its margin lending business, Leveraged Equities (LE), in response to early stirrings in investor confidence.
Mike Hirst, managing director of Bendigo and Adelaide Bank, said that it had moved quickly to increase investment into LE as it sensed improvement in investor sentiment that it expected would flow through into increased borrowings.
“Leveraged Equities has just completed a very successful campaign for customers who wish to prepay the interest on their loans,” he said.
“The better-than-budgeted result underlines the strong position Leveraged Equities has in the margin lending sector and is a great reflection of the customer value proposition delivered every day by the staff and management within that business.”
Hirst said that the result also highlighted the fact that Australia may well have seen the bottom of the market for the margin lending sector.
“The reality is that the sector has experienced a downturn over the last few years, as a direct result of the Global Financial Crisis, and we have been managing our business in the context of falling revenues, as has every other player in the market,” he said.
“These conditions have seen rationalisation across the sector with some players exiting, some consolidating and subsequent job losses.
“(And) while we have not been immune to any of this, we elected to redirect some of our effort towards new revenue opportunities and have been successful in gainfully employing resources that would otherwise have been idle,” Hirst continued.
“Pleasingly, taking a line through the prepaid campaign, we may be about to enter an upturn in the margin lending business cycle, as we are seeing some signs of a return in investor risk appetite,” Hirst said.
“Although it is early days yet, it does seem that the time is right to invest further in the margin lending business to ensure we are not late-comers to the opportunity.”
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