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Bendigo and Adelaide Bank (ASX:BEN) share price higher following Q1 update

Bendigo Bank shares
Bendigo bank

The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price is trading higher following the release of its first quarter update.

At the time of writing the regional bank’s shares are up 0.5% to $6.71.

How did Bendigo and Adelaide Bank perform in the first quarter?

Bendigo and Adelaide Bank has started FY 2021 strongly in respect to its lending.

According to the update, the bank achieved total lending growth of 11% and residential lending growth of 16.1% during the first quarter. Management notes that these are both well above system growth.

In addition to this, the company’s net interest margin (NIM) continues to be well managed, increasing one basis point since the end of the second half of FY 2020 to 2.3% for the first quarter.

Bendigo and Adelaide Bank’s Managing Director, Marnie Baker, commented: “In line with our strategy, we are focused on driving sustainable growth through active cost management, and we continue to target income growth to exceed cost growth this financial year.”

The company’s leader also revealed that the bank is well-placed to navigate the pandemic.

“Our sights are firmly fixed on achieving outcomes for all stakeholders and we are adequately provisioned to manage through the pandemic. Pleasingly, the number and balances of COVID-19 support packages have significantly reduced, including in Victoria, as the Bank continues to work individually with customers on repayment deferral arrangements,” she explained.

Customer accounts on deferral.

As of 16 October, Bendigo and Adelaide Bank had 6,797 customer accounts still on deferral. This is down a sizeable 69% from the peak on 31 May and down 63% since 31 August.

The value of the accounts where repayments have been deferred is ~$2.5 billion. Once again, this is down significantly from the peak, which was $6.9 billion in June.

Residential and consumer support packages total 4,408 accounts, down 74% since the peak in May. Whereas, Commercial support packages total 2,389 accounts, down 49% since peaking in July.

These numbers are expected to continue to reduce in coming months as repayment deferral periods expire and Melbourne reopens.

Marnie Baker commented: “It’s rewarding to see our personalised support has enabled more than two-thirds of these customers to get back on their feet and we are further encouraged by the Victorian Premier’s announcement to reopen Melbourne’s retail and hospitality industries from tomorrow.”

Though, the bank remains very supportive of those that are still in need of help.

“We are also committed to ensuring tailored arrangements are agreed with those customers still on repayment deferral arrangements prior to their deferral period ending, and that measures are in place to allow for a smooth transition and fair outcomes are achieved for customers and shareholders,” the managing director concluded.

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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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