Bendigo profit dips

Hopes for post-commission benefit

BENDIGO and Adelaide Bank shares have taken a dive after a 2.4 per cent dip in firsthalf profit, but the regionally focused lender hopes to benefit from the big four’s public relations disaster at the royal commission.

In revealing a flat $219.8 million first-half cash earnings result yesterday, Bendigo Bank managing director Marnie Baker told investors that an “uneven playing field” in the banking industry had not only inhibited the growth of smaller lenders but also served as a catalyst for the wrongdoing uncovered at the financial services inquiry.

“Trust in the banking sector was and is still at an all-time low,” Ms Baker said.

“We know consumers are looking for an alternative, and as an organisation that puts the interests of customers first, we are well-placed, given the strength of our product offering, our market leading customer service and our price competitiveness to be that for them.”

Subdued earnings knocked the bank’s share price down by as much as 5 per cent in early trade yesterday, with first half statutory profit also taking a hit, down 12.3 per cent to $203.2 million.

Ms Baker pointed to tighter lending standards, as well as diminishing margins and increased costs due to tougher regulatory conditions for the decrease. Net interest income for the half decreased $11.5 million to $656.5 million, while expenses increased by $18.7 million or 4.2 per cent on salary increases, and an increase in legal costs and software licence fees.

Ms Baker said Kenneth Hayne had made strong recommendations on how to better deliver for customers, and added there was considerable scope for government to supplement the final report.

“(But) we do need to watch out for the unintended consequences on the availability of credit, and demand leaking into the unregulated sector,” she said.

Ms Baker said any changes from the Royal Commission would likely be procedural and policy related rather than structural.

The bank announced a fully franked interim dividend of 35 cents per share, in line with the prior period.

AAP

Picture: AFP A flood-affected area near AACo’s northern Queensland properties. LIVESTOCK operator Australian Agricultural Company is stuck between drought and flood, with the listed farm services provider bracing for ‘extreme’ losses at its 30,000-head Gulf property Wondoola station while counting the cost of dry weather elsewhere. Shares in the company were down by more than 12 per cent yesterday after it announced it expected heavy losses across its four flood-affected northern Queensland properties. Of AACo’s northern properties, Canobie, Dalgonally and Carrum stations have a total current herd of about 50,000 head of mainly cows and their calves, and are expected to sustain lower losses than Wondoola, about 480km northeast of Mount Isa, where livestock losses are expected to be severe. It said in a release to the ASX that the full effects of the flood were being managed and measured in real time.More than 500,000 head of cattle are predicted to have been lost after a year’s worth of rain fell in two weeks across the region. Early estimates put the damage to the northern Queensland farm sector in excess of $300 million.Despite the losses, AAco said it would still be able to fulfil its supply obligations and the rollout of its branded beef strategy.Conversely, drought continues to sap the larger share of the company’s properties, which are situated across southwestern Queensland and the Northern Territory.