Bendigo and Adelaide Bank share price plunges following FY21 results

We examine the highlights from the bank’s FY21 report.

The Bendigo and Adelaide Bank share price finished out Monday’s session down 9.91% to $10.00 per share, as investors grappled with the bank’s full-year, FY21 results. Following that plunge, the stock remains up just 5.82% for the year.

Commenting on those results, the bank's MD and CEO, Marnie Baker said:

'These results clearly demonstrate our strategy is making us a bigger, better and stronger business. We have delivered on what we said we would do and more by growing customer numbers and market share in both lending and deposits.

'We continue to act with care, customers and community in mind and our transformation has improved out efficiency, productivity, speed to market, and customer experience.'

FY21 results in focus

Today’s share sell-off comes even after the bank post a solid set of full-year results, with net profits surging 172% and residential lending growing above system.

On the top-line, Bendigo and Adelaide bank saw its revenues edge higher – with total income gaining 4.5% for the full year to come in at $1,702 million.

This revenue figure was supported by solid growth in the bank’s loan book and customer base. Residential lending was the standout here, growing at 14.8% or 2.8x system. All up, the bank's total lending portfolio now stands at $72.2 billion, rising 10.6% in the last year.

The bank saw its customer base increase close to 10% in FY21 – hitting 2.06 million by the close of fiscal 2021.

Elsewhere, on the bottom-line, the bank reported very strong profit growth: statutory net profits were up 172% to $524.0 million, while cash earning (on a post-tax basis), gained 51.5% to come in at $457.2 million. This results in earnings per share (EPS) of 85.6 cents per share.

As with CBA last week, BEN reported a weaker net interest margin of 2.26%, down 7 basis points year-on-year.

However, from a capital perspective, the bank reported a CET1 ratio of 9.57%, a metric that sits below many of the major banks.

Buoyed by that good earnings growth, the bank has determined to pay a final dividend of 26.5 cents per share, taking the bank’s full-year FY21 dividends to 50 cents per share – equal to a payout ratio of 58.4%. In FY20 BEN paid total dividends of 35.5 cents per share.

The Ferocia play

In a sperate announcement, Bendigo and Adelaide Bank announced it would be Ferocia in a deal valued at up to $116 million.

Management said the acquisition would help the bank accelerate its digital strategy as well as 'shape the future of banking for a new generation of customers.'

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