Bendigo and Adelaide Bank Shares Drop 3.71% on Increased Competition and Arrears Concerns

2 min read | August 26, 2024 01:05 PM AEST | By Team Kalkine Media

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Shares of Bendigo and Adelaide Bank (ASX:BEN) fell as much as 3.71% to AU$11.94 on Monday, marking their largest intraday percentage drop since 5 August 2024. The decline follows the release of the bank's FY24 earnings report, which has raised concerns among investors.

Earnings and Competition Impact

Bendigo and Adelaide Bank reported a 2.6% decrease in cash earnings attributable for FY24. This drop was attributed to intensified competition in the consumer division during the first half of the fiscal year, impacting overall profitability.

Arrears and Future Projections

In the residential lending sector, the bank saw a slight increase in 90-day-plus arrears, which rose by 8 basis points over the year. Despite this, the company remains optimistic, stating that it expects arrears to revert to long-term averages, which are low by industry standards.

Increased Investment Plans

Looking forward, Bendigo and Adelaide Bank plans to boost its investment spending for both FY25 and FY26. The bank aims to increase cash investment by AU$30 million to AU$40 million (approximately $20.39 million to $27.18 million) compared to FY24 levels. This strategic investment is intended to support future growth and operational efficiency.

Trading Volume and Year-to-Date Performance

The trading volume for Bendigo and Adelaide Bank shares exceeded 1.1 million, compared to the 30-day average volume of around 1.2 million shares. Despite the recent drop, the stock is up 28.23% year-to-date as of the last close, reflecting a strong performance over the year.

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