Why is the Bendigo Bank (ASX:BEN) share price having such a tough time of late?

Bendigo Bank shares haven’t done much in recent months.
The post Why is the Bendigo Bank (ASX:BEN) share price having such a tough time of late? appeared first on The Motley Fool Australia. –

The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price has been falling in recent times. It has dropped more than 10% over the last three months.

It was in August that the regional bank reported a mixed set of numbers in FY21.

If you didn’t catch the result, here are some of the highlights:

Bendigo Bank’s FY21 numbers

Total income on a cash basis were up 4.5% to $1.7 billion. Statutory net profit increased by 172% to $524 million.

Cash earnings after tax grew by 51.5% to $457.2 million. On a per-share basis, earnings went up 43.4% to 85.6 cents.

The balance sheet also strengthened, with the common equity tier 1 (CET1) capital ratio improved by 32 basis points to 9.57%.

However, the net interest margin (NIM) fell by 7 basis points to 2.26%. Bendigo Bank explained that this happened due to significant growth in fixed lending and competitive new business rates. The funding mix and deposit repricing benefits provided a tailwind throughout the year, according to the bank.

Bendigo Bank pointed out that it was successful in achieving growing customer numbers and increasing market share in both lending and deposits. It has been working on a transformation which has helped its efficiency, productivity, speed to market and the customer experience. Its net promoter score (NPS) of 27.3 was “well in excess” of the industry average of 25.7 points and the average of the major banks (29.8 points).


Investors sometimes decide that an outlook can be very important how to value a business, which could impact the Bendigo Bank share price.

The regional bank noted that the historic low interest rate environment continues to place pressure on its margins. However, it’s taking advantage of “strong” customer lending demand across its consumer, business and agribusiness divisions.

It’s expecting its lending to grow quicker than the overall loan system, whilst maintaining a focus on costs, improving productivity and preserving a “strong and resilient” balance sheet.

Annual general meeting (AGM)

Bendigo Bank is holding its AGM today. The managing director and CEO, Marnie Baker, had a few more comments about the outlook, who said:

The depth of the economic contraction through the pandemic has not been as severe as initially expected, which has improved the forward outlook…I’m encouraged by the recent rise in consumer and business confidence, the reopening of domestic and international borders and the resilience demonstrated by the Australian economy in the last financial year.

With that said, the operating environment for the banking industry has its challenges, with net interest margins experiencing continued compression and the lending environment remaining highly competitive.

We continue to manage our cost base relative to revenue expectations, delivering on our commitment to further reduce our cost to income ratio and lift shareholder returns.

Is the Bendigo Bank share price a buy today?

The brokers at Macquarie Group Ltd (ASX: MQG) think that it is worth a buy, with a price target of $11. Macquarie believes the low valuation makes up for the difficulties that the bank is currently seeing. The broker is expecting margins to remain challenged by the current environment, though it thinks revenue can keep rising.

Macquarie thinks that Bendigo Bank is valued at under 14x FY22’s estimated earnings with a forward grossed-up dividend yield of 8.5%.

The post Why is the Bendigo Bank (ASX:BEN) share price having such a tough time of late? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Bendigo Bank right now?

Before you consider Bendigo Bank, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Bendigo Bank wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

These 6 ASX shares are going ex-dividend this week

Why is the Macquarie (ASX:MQG) share price sliding lower today?

5 things to watch on the ASX 200 on Monday

Top brokers name 3 ASX shares to buy next week

Why did the Macquarie (ASX:MQG) share price have such a great month in October?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bendigo and Adelaide Bank Limited and Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!