Bendigo and Adelaide Bank has reported a sharp increase in lending volumes, with new mortgage business soaring by 16.1 per cent in the September quarter.
Managing director Marnie Baker revealed details of the business surge on Tuesday in her address to shareholders at the company’s virtual annual meeting.
“Lending continues to be a strength with year to date growth at 11 per cent and residential lending at 16.1 per cent, both well above industry levels – an outstanding outcome in a low growth environment,” she told shareholders.
“Our net interest margin also improved in the first quarter, up 1 basis point on the second half of the 2020 financial year.”
The disclosures sparked a modest rally in Bendigo’s share price, which closed up 15 cents or 2 per cent to outperform all other ASX-listed banking stocks.
Bendigo reported a 49 per cent fall in annual profit to A$193 million for the 12 months to the end of June mainly due to Covid-related cost blowouts and margin contraction.
While the loan growth recovery might augur well for Bendigo’s December half performance, the board did not clarify whether it will pay a final dividend for the 2020 year.
Bendigo chair Jacqueline Hey indicated that if a final dividend is eventually paid, shareholders would likely not receive it until next March.
“We do recognise the difficulty the final dividend deferral may have caused to some of our shareholders,” Hey told the meeting.
“At this point in time, the board continues to closely evaluate the ongoing challenging and uncertain market conditions and will further review this decision as part of our first half year dividend considerations in February 2021.”
Hey highlighted the company’s strong tier one capital position in her address, but skirted the sensitive issue of liquidity.
APRA last week increased Bendigo’s minimum liquidity requirement after the bank confessed to material breaches in calculating its ratios for liquidity coverage and net stable funding.
While the regulator said the breaches did not impact the overall soundness of the bank, they nonetheless raised questions about the bank’s past risk management practices.
Hey also elected not to address the findings of a damning report published in September by the Banking Code Compliance Committee that highlighted serious and systemic breaches in collecting debts from troubled borrowers and handling complaints.
After the meeting Hey won plaudits from shareholder activists for the way she conducted the online AGM.
“I was impressed by how it was run and congratulated the chair for that,” said Eric Pascoe from the Australian Shareholders’ Association.
Shareholder activist Craig Caulfield from the Bank Warriors action group also complimented Hey’s “diligent” management of the meeting, but he noted that not all questions submitted to the online meeting were put to the board.
“The selective rejecting of questions contradicted the chair’s original commitment to read every question,” he said.
“However, today’s Bendigo AGM was better handled than the sanitised, screened and filtered CBA AGM where not a single one of my questions was read out.”