Here’s why the Auswide Bank (ASX:ABA) share price is rising today

The Auswide Bank share price moved higher by as much as 1.7% in morning trade. This move follows a positive AGM presentation today.
The post Here’s why the Auswide Bank (ASX:ABA) share price is rising today appeared first on Motley Fool Australia. –

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The Auswide Bank Ltd (ASX: ABA) share price moved higher by as much as 1.7% in morning trade today. This move follows a positive presentation released today prior to the company’s AGM, which commenced at 11 am AEST. 

Auswide Bank shares have since settled to their current level of $5.82 per share, up 0.34%.

What does Auswide Bank do?

Auswide Bank was formerly known as Wide Bay Australia. Wide Bay might be a more familiar name for a lot of readers – the company has been in business for more than 50 years. As with any bank, the service range is vast. For Auswide Bank, this includes both personal and business products.

Formed in 1979 as “Wide Bay Capricorn Building Society”, the company has evolved over time and in 1994 listed on the ASX.

Today, Auswide Bank’s assets exceed $3 billion.

What were the highlights of the AGM presentation?

Today’s AGM presentation included a number of positives.

Net profit after tax (NPAT) was up by 7.6% (including the effects of COVID), rising from $17.201 million in FY19 to $18.504 million for FY20.

NPAT excluding the effects of COVID was much higher. Today’s CFO presentation highlighted that if the bank excluded the COVID impact, NPAT was actually up by 16.9%. This means that the FY20 result would be $20.114 million. 

The bank reported its net interest revenue is up 11.6%, which it attributed to strong and profitable loan book growth. This revenue stands at $70.516 million for FY20. Auswide’s loan book growth in relation to this same point is up by 4.3%.

Auswide reported its deposits are up by 10.4%. The physical result of this was $2.62 billion in FY20 compared to $2.373 billion in FY19. This means that deposits now account of 74.5% of funding for Auswide. In comparison, in FY19, deposits made up 71.4% of funding.

One thing that fell away during FY20 was the bank’s dividend. Total dividend per share for FY20 was 27.75 cents per share, down from 34.5 cents per share in FY19.

Strong FY21 results indicated

The company also announced strong financials for the start of FY21. 

Some early data (YTD October 2020 vs YTD October 2019) includes:

  • NPAT up by 33.7%, from $5.569 million to $7.444 million
  • Loan book up 7.9%, from $3.182 billion to $3.434 billion
  • Net interest revenue up 11.7%, from $22.550 million to $25.194 million
  • Deposits up 15.2%, from $2.442 billion to $2.815 billion.

Auswide share price summary

The Auswide Bank share price is trading slightly higher on this positive news today, but overall this year Auswide shares are more or less flat. However, the Auswide bank share price has seen a strong recovery since the COVID crash in March, rising from a low of $3.30 to its current price of $5.82, or around 77% in 9 months.

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Motley Fool contributor glennleese has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Here’s why the Auswide Bank (ASX:ABA) share price is rising today appeared first on Motley Fool Australia.

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