Bendigo to fund helping hand
BENDIGO and Adelaide Bank has set aside almost $150 million to cover the financial impact of the coronavirus pandemic as it braces for a sluggish economic recovery.
The regional banking heavyweight revealed yesterday that it had provided “dedicated support” to more than 20,000 personal and business customers affected by the economic fallout.
It has made a provision in its accounts of $148.3 million for loans that turn sour and other potential costs. In a trading update, the group said it was making the provision in part due to a “significant change to the base case economic outlook given COVID-19 impacts”.
That “base case” included weaker economic output, “higher unemployment, and a reduction in residential and commercial property prices”, it said.
“The bank has not assumed a sharp recovery in the adopted economic outlook, but rather a slower recovery with probabilities biased to the downside,” Bendigo said.
It said the extra provision reflected its view on the impact of the pandemic, and did not reflect “any deterioration in observed credit quality”.
The bank said that last month, there had been a fall in the proportion of home loan customers who were 90 days or more behind on repayments, albeit as it stopped pushing those customers to make payments and instead “redirected” resources to help them.
Managing director Marnie
Baker said the company was “fully committed to supporting our customers and communities through this unique time in history”.
“We have provided more than 20,000 personal and business accounts with dedicated support to give them the best possible opportunity to weather the COVID-19 impacts,” Ms Baker said in a statement.
Bendigo shares rallied yesterday, closing 4.1 per cent, or 26c, higher at $6.55.