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BEN

Bendigo and Adelaide Bank FY19 Results

Jordan Baird

Jordan Baird is the head ASR Wealth Advisers client services desk and has been with the organisation since 2017. He first started investing in his early years. While he believes that investors should leave no stone unturned he has a particular interest in trading based on broad macroeconomic trends along with specific analysis of innovative up-and-coming companies.

Bendigo and Adelaide Bank (ASX: BEN) is the 5th largest retail bank in Australia. BEN has around A$71.4 billion of assets under management and around 1.7 billion customers. BEN has a market capitalisation of A$5.28 billion.

Bendigo-Bank-Share-Price

 

What are the results from BEN FY19?

Today (Monday 12 August 2019) BEN released its FY19 annual results. The main points are as follows:

  • Cash earnings after tax for FY19 is A$415.7 million, down 6.6 per cent from FY18.
  • Net interest margin for FY19 is 2.36 per cent, maintained from FY18.
  • Underlying earnings after tax for FY19 is A$435.7 million, down 2.5 per cent from FY18.
  • Cash earnings per share for FY19 is 85.0 cents per share, down 7.7 per cent from FY18 of 92.1c.
  • Dividends per share for FY19 is 70.0 cents per share (fully franked), the same as FY18.

Specific results on company operations are as follows:

  • Net interest income for FY19 is A$1,285.8 million, down 1.5 per cent from FY18.
  • Other operating income for FY19 is A$281.7 million, down 16.7 per cent from FY18.

Statutory profit results are as follows:

  • Total income for FY19 is A$1,567.5 million, down 4.6 per cent from FY18.
  • Total expenses for FY19 is A$1,015.5 million, up 6.5 per cent from FY18.
  • Profit after income and tax expense for FY19 is A$376.8 million, down 13.3 per cent from FY18.

BEN, as well as other banks and financial institutions in Australia, faced a number of compliance and legal costs associated with the Royal Commission into the Banking, Superannuation and the Financial Services Industry in FY19.

What is the outlook for BEN?

Looking towards the future, BEN has identified 4 key priority markets that include existing customers, millennials, small to medium business and family corporate farms. In FY19, existing customers grew at 0.3 per cent, millennials grew at 453 per cent, small to medium business grew at 5 per cent and family corporate farms grew at 11 per cent. The main victory for BEN within these key markets is strong growth within the millennials market. This has come from BEN targeting this market specifically as it is expected to provide long-term growth for BEN.

The managing director Ms Baker said “As we continue to accelerate the digitisation of our offerings and focus on our priority markets ... establishing and fostering lasting relationships with this younger demographic will deliver significant long-term growth opportunities”.

Targeting millennials encompass one of the main strategies for BEN moving into the long-term that could underpin future growth and cash flow.

BEN-HALO-12.8.19

Source: HALO Technologies 12:30pm – 12/08/19

What is the market reaction?

The share price opened today on Monday (12 August 2019) around A$11.00, representing a 2.4 per cent increase. This is a slightly positive market reaction to BEN FY19 results. BEN is currently trading at a P/E ratio in the low teens and has an annual dividend yield of 6.5 per cent (fully franked).

 


 

Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978) (“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.

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