The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price is sliding today.
Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed on Friday trading for $12.40. In morning trade on Monday, shares are changing hands for $12.20 apiece, down 1.6%.
For some context, the ASX 200 is up 0.4% at this same time.
This underperformance comes following the release of Bendigo Banks's financial results for the year ended 30 June (FY 2024).
Read on for the highlights.
Bendigo Bank share price slips on lower cash earnings
- Statutory net profit after tax (NPAT) of $545 million, up 9.7% year on year
- Cash earnings after tax of $562.0 million, down 2.6% from FY 2023
- Net interest margin (NIM) of 1.90%, down 0.04% from FY 2023
- Common equity tier 1 (CET1) ratio increase 0.07% t0 11,32%
- Final fully franked dividend of 33 cents per share, up 3.1% from the prior final dividend
What else happened with the ASX 200 bank stock during the year?
Other key financial metrics pushing and pulling on the Bendigo Bank share price today include a 3.1% year-on-year increase in the company's residential lending book, which reached $60.4 billion.
Customer deposits also increase by 3.4% from FY 2023 to $68.3 billion.
Meanwhile, cash return on equity (ROE) fell 0.44% to 8.18%.
The 2.6% decline in cash earnings comes as competition among the banks in the lucrative mortgage markets remained intense over the year.
The lower NIM was impacted by lending and deposit pricing in the first half, though the bank noted that its NIM improved in the second half of the financial year.
While gross impaired loans increased 8.7% to $135.7 million, this still only represents 0.17% of the ASX 200 bank's gross loans. In residential lending, 90-day plus arrears increased by 0.08% amid the ongoing inflationary and high interest rate environment.
The final dividend of 33 cents per share brings the full FY 2024 dividend payout to 63 cents per share, fully franked, up 3.3% from last year.
What did management say?
Commenting on the results that have yet to lift the Bendigo Bank share price today, CEO Marnie Baker said:
Customer deposits grew 3.4% over the year, supported by our digital deposit channels and the continued strength of our well-established deposit franchise, with deposits from Community Banks growing 8.3%.
The bank fully repaid the Term Funding Facility in June, and our Liquidity Coverage Ratio (LCR) remains in a strong position at 137.8%…
Customer growth continued in FY24, with a year-on-year increase of 9.1% to more than 2.5 million customers and the Bank's Net Promoter Score is +27.9 points above the industry.
Up, our leading digital bank, grew customer numbers by 29% over the year helping to expand our reach and drive our vision to be Australia's bank of choice.
What's next?
Looking at what could impact the Bendigo Bank share price in the year ahead, the ASX 200 bank expects official interest rates to remain elevated at current levels into 2025 amid persistent inflation, which will continue to pressure households.
The bank said it will increase investments in its key growth areas to improve its digital capabilities. Management is targeting to increase investment spending in FY 2025 and FY 2026 by $30 million to $40 million from FY 2024 levels.
The bank said its medium-term targets of reducing its cost-to-income ratio to 50% and lifting its return on equity above its cost of capital remain unchanged.
Bendigo Bank share price snapshot
With today's intraday loss factored in, the Bendigo Bank share price remains up 29.5% over 12 months.
