S&P/ASX 200 Index (ASX: XJO) bank stock Bendigo and Adelaide Bank Ltd (ASX: BEN) has delivered some market-beating returns over the past 12 months.
Despite shares dropping 1.3% yesterday (amid a wider market sell-off) to close the day at $12.12 apiece, the Bendigo Bank share price is up more than 38% since this time last year, when shares were trading for $8.77.
And those gains don't include the 66 cents in fully franked dividends the ASX 200 bank stock has paid out over this period. If we add those back in, then Bendigo Bank's accumulated share value has gained around 46% over the full year.
For some context, the ASX 200 is up by around 20% over this same period, while the S&P/ASX 200 Gross Total Return Index (ASX: XJT) – which includes all cash dividends reinvested on the ex-dividend date – has gained around 24%.
With that strong outperformance in mind, has the time come to take some profits on Bendigo Bank shares?
Why this ASX 200 bank could face added headwinds
Shaw and Partners' Jed Richards believes Bendigo and Adelaide Bank could have a tougher year ahead of it than some of its bigger rivals.
Richards noted that the Bendigo Bank share price "has performed well in calendar year 2024, increasing from $9.70 on January 2 to trade at $12.20 on October 17" (courtesy of The Bull).
As for his sell recommendation on the ASX 200 bank stock, he said:
Australian banks have been quite open about the lack of growth opportunities in a softer economy. The bigger banks have deeper pockets to handle a challenging slowdown.
Investors may want to consider cashing in some gains until Australia's economic growth outlook improves.
What's been happening with Bendigo Bank?
Bendigo and Adelaide Bank reported its full-year (FY 2024) results on 26 August.
Although cash earnings after tax of $562 million were down 2.6% from FY 2023, statutory net profit after tax (NPAT) of $545 million was up 9.7%.
The fall in FY 2024 cash earnings was reported to be driven by ongoing intense competition among Aussie banks in the lucrative mortgage markets.
While not a huge fall, the 0.04% year-on-year decline in the ASX 200 bank stock's net interest margin (NIM) to 1.90% likely reflects that competitive pressure.
Investors will also have noted that management expects Australia's official interest rate to remain at current levels into 2025 amid persistent inflation. Higher rates for longer are, in turn, expected to continue to pressure households.
