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Bendigo and Adelaide Bank shares on watch after COVID-19 update

The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price will be on watch on Thursday after the release of a COVID-19 update.

What did Bendigo and Adelaide Bank announce?

This morning the regional bank has announced the withdrawal of its second half FY 2020 financial outlook commentary due to the effects of COVID-19.

In February Australia’s fifth-largest retail bank advised: “We expect our mortgage lending growth rates to continue to exceed system, our small business portfolio to continue to grow at similar rates and our Commercial Real Estate business to grow.”

However, given the level of uncertainty created by the COVID-19 pandemic and the difficulty this presents in providing future guidance, management believes it is prudent to withdraw its outlook commentary.

Balance sheet update.

Pleasingly, Bendigo and Adelaide Bank’s balance sheet remains strong and its capital position is well beyond APRA’s unquestionably strong benchmark target.

It currently has a pro-forma CET1 ratio of 9.8%, following the recently completed institutional placement and share purchase plan.

Management also advised that it is well-positioned from a funding and liquidity perspective.

It notes that its retail funding strategy and profile is supported by a high level of customer deposits. These are are complemented by prudent exposure sourced from wholesale funding markets.

The bank advised that it continues to manage its Liquidity Coverage Ratio and Net Stable Funding Ratio well in excess of the regulatory minimum requirements.

Bendigo and Adelaide Bank’s managing director, Marnie Baker, commented: “As Australia’s fifth biggest retail bank and one of Australia’s most trusted brands, Bendigo and Adelaide Bank is in a very strong position to support customers, staff and communities throughout this pandemic and beyond. We’re here to help them through this.”

Almost all of the bank’s corporate site employees have shifted to work from home arrangements, while its branch network remains open. With banking considered an essential service, the bank intends to continue to support and service all its stakeholders.

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Motley Fool contributor James Mickleboro 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.

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