S&P/ASX 200 Index (ASX: XJO) bank stock Bendigo and Adelaide Bank Ltd (ASX: BEN) is in the red today.
Bendigo Bank shares closed yesterday trading for $13.46. In early afternoon trade, shares are changing hands for $13.26 apiece, down 1.52%.
For some context, the ASX 200 is down 0.58% at this same time.
But it's not just Bendigo Bank shares underperforming today.
Here's how the big four ASX 200 bank stocks are faring on Tuesday:
- Commonwealth Bank of Australia (ASX: CBA) shares are down 1.81%
- ANZ Group Holdings Ltd (ASX: ANZ) shares are down 1.57%
- National Australia Bank Ltd (ASX: NAB) shares are down 2.45%
- Westpac Banking Corp (ASX: WBC) shares are down 2.05%
The Aussie banks are all suffering today following China's Politburo meeting on Monday.
Why?
Well, President Xi Jinping's government is signalling significant new stimulus measures for 2025. This sees investors piling into ASX 200 mining stocks like BHP Group Ltd (ASX: BHP) amid an uptick in iron ore and copper prices and improving sentiment for the new year.
And as more money pours into the big Aussie miners today, some of it is being pulled out of ASX 200 bank stocks.
Despite today's retrace, Bendigo Bank has delivered some outsized gains over the past 12 months.
As you can see in the above chart, the Bendigo Bank share price has soared 44% since this time last year. In addition to those capital gains, the stock also trades on a fully franked trailing dividend yield of 4.8%.
That puts it in the upper half of the best-performing ASX 200 bank stocks over the full year.
However, Catapult Wealth's Dylan Evans believes the regional bank could face a more challenging 2025 (courtesy of the Bull).
Time to sell this ASX 200 bank stock?
"Lack of scale and higher costs leaves Bendigo struggling to compete with the major banks on interest rates, without sacrificing profit margin," said Evans, who has a sell rating on the ASX 200 bank stock. "As a result, regional banks, including Bendigo, can be less profitable over the longer term."
Evans said Bendigo Bank's FY 2024 results raised some red flags:
Statutory net profit after tax rose 9.7% in fiscal year 2024 when compared to the prior corresponding period, but cash earnings after tax were down 2.6%. The net interest margin of 1.9% was down 4 basis points and the cash return on equity was down 44 basis points.
According to Evans, the big four Aussie banks like CBA, ANZ, NAB and Westpac could outperform Bendigo Bank in 2025.
"We believe the major banks offer potentially more upside than Bendigo moving forward," he said.
