Bendigo and Adelaide Bank (ASX: BEN) saw its annual cash profit grow to $348 million, up 7.7% on the prior year.  The group announced a fully franked final dividend of 31 cents per share, a 3.3% increase on the prior half.  Earnings per share were 85.4 cents up 1.4% on the prior year.

Competition from the big four banks has long loomed over Bendigo’s retail growth strategy and total retail deposits were marginally up on the prior year. This fiercely competitive market makes up approximately 80% of the bank’s total funding and reliance continues to be placed on brand loyalty through superior customer service.

The bank is rated A by all three major credit rating agencies and completed two notable funding offers in the financial year. They were the bank’s first senior unsecured wholesale raisings since the start of the Global Financial Crisis and any improvements in wholesale funding markets would benefit Bendigo.

In a statement Hirst noted that while consumer confidence and the demand for credit remains low the outlook remains mixed. The bank’s shares traded flat on Monday, reflecting a result in line with expectations.

Foolish takeaway

Compared to the fully valued big four banks, the stock looks reasonably priced. It trades on an undemanding price to earnings ratio just over 12 with an attractive dividend yield of 5.7%. The bank remains in an ultra-competitive environment though and should be considered on a long-term basis.

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Motley Fool contributor Tom Richardson does not own shares in any of the companies mentioned in this article.