The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price dropped 7% in November 2021. What could be next for the regional bank?
Last month saw the challenger bank drop from $9.25 to $8.57.
What happened in November 2021 that may have impacted the Bendigo share price?
Whilst there has been significant commentary on the Omicron COVID-19 variant and inflation impacts on potential interest rates, Bendigo Bank itself did make two notable ASX announcements.
One event was the bank’s annual general meeting (AGM), where it gets to tell shareholders about the last financial year and normally comments on the outlook for the next financial year (and beyond).
Bendigo Bank noted that it has been growing its customer numbers and market share in both landing and deposits through improved productivity, speed to market, its “robust” balance sheet and digital acquisitions and investments.
Its customers numbers grew 9.6% to more than 2 million, whilst its net promoter score – a metric which measures the likelihood of customers recommending the bank to a friend or colleague – remains nearly 26 points ahead of the industry average.
The key strategic focus of the business is to reduce complexity, invest in capability and tell its story to customers so that it’s Australia’s bank of choice and drive long-term sustainable value.
It’s seeking partners that can help extend the bank’s reach and capability. This can be in a number of different areas including product providers, technology, distribution or unique partnerships.
Bendigo Bank recently acquired Ferocia to accelerate its digital strategy and Up’s growth. Up is Australia’s highest rated banking app.
Management also commented that in this year, the bank has continued to grow market share, customer numbers, total lending and deposits. Hearing about ongoing growth can have an impact on investor thoughts about the Bendigo Bank share price.
Another positive that Bendigo referred to was that the economic contraction was not as severe through the pandemic as initially expected, which has improved the forward outlook.
Near the end of November 2021, Bendigo outlined its digital transformation roadmap.
In FY22 and FY23 the bank outlined that it’s going to work on loan processing automation. Between FY22 and FY24 it’s continuing broadening its in-app sales and self-service capability, as well as offering new digital propositions.
It outlined a number of targets that it wants to achieve by FY24, improving from what that metric was in FY19.
Bendigo Bank wants to improve the average time to a decision for home loans from 22 days to 1 day. The bank wants to improve the percentage of automated credit decisioning on home loans from 0% to 90%. It wants to increase the percentage of active e-banking customers from 53.9% to 90%. Finally, it wants to grow the percentage of sales by digital channels from 19.2% to 60%.
Is the Bendigo Bank share price good value?
Brokers are mixed on the regional bank. One of the most recent ratings has come from Citi, which rates it as a ‘neutral’ with a price target of $9.25.