The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price lagged the benchmarks and other majors in 2021 and finished the year down approximately 2% down at $9.10.
After a period of lumpy returns to fill the 1H 2021, shares in the bank then began consolidating and had nudged below 52-week lows by November.
Bendigo Bank then bottomed in December, before regaining support at the $8.49 level. Any movement to the upside from here will be working off a low base – especially for those investors who entered a position at these lows.
There were numerous inflection points littered throughout the year for the Bendigo Bank share price. These ranged from internal drivers like a uniform recycling program to external factors such as the bank's "digital transformation roadmap" and various broker upgrades.
Aside from this, Bendigo rewarded shareholders with a 53 cents per share dividend across the period. That's slightly down on prior years but a recovery from 2020. At its current share price, the bank is now trading on a 5.7% trailing yield.
Alas, shareholders with positions longer than 1 year realised a loss on their Bendigo Bank holdings in 2021, even when factoring in the total return from dividends.
And while several majors are currently outperforming, Bendigo is lagging the S&P/ASX 200 Financials Index (ASX: XFJ)'s return of 2.5% so far this year. It lagged the index's return of approximately 22% substantially last year as well.
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What can investors expect for Bendigo Bank in 2022?
The team at Goldman Sachs is neutral on the Bendigo Bank share price and values the bank at $9.90 per share. Although this implies a slither of upside potential, Goldman cautions investors over Bendigo's earnings volatility due to pressures on its regional banking segment.
While other majors have similar exposure here, Goldman notes Bendigo lacks the directives to hedge these pressures to profitability.
The firm notes that Bendigo's loan book is skewed to bias 72% and 78% towards Australian mortgages, whereas it has underwritten almost half of its new mortgages of fixed rates in 2H 2021.
Bendigo Bank is also considered a price taker in the mortgage market, meaning it lacks the kind of pricing power of some of the larger banks.
Goldman notes the company will have to rely on the large banks to "drive further fixed-rate mortgage repricing" in order to level out these headwinds.
Meanwhile, JP Morgan also cautions investors on the bank as an investment in 2022. It remains neutral on the Bendigo Bank share price as well.
Back in November, Jefferies raised its rating on the company to a buy from a hold, citing company-specific tailwinds outlined in its digital transformation roadmap.
The broker noted Bendigo's pathway to earning more than its cost of capital is murky and that it may lack the scale to fund its ambitions.
How's the Bendigo Bank share price faring so far this year?
In the first week of trading in 2022, the bank's share price has spiked.
Even though it has lagged the broad indices, the bank is now trading back near its 3-month rolling averages again. Volume has also been fairly consistent in the last 4 weeks.
Shares finished the session in the red yesterday, down less than 1% at $9.25. In early trading today, they are down 0.22% at $9.23. Many of Bendigo Bank's peers have been choppy over the last month or so as well.
However, shares have shot up to start the year and time will tell if momentum from the wider sector will spill over to Bendigo's share price.
