Bendigo and Adelaide Bank Ltd
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
A$82.50 | Szspw | Rgbpmky |
Bendigo Having No Issues Growing Loans, Only Problem is Costs Keep Rising
After reviewing our outlook for Bendigo and Adelaide Bank, or Bendigo, we have made modest adjustments to longer-term operating cost and loan loss expectations which increase our fair value estimate by 3% to AUD 9.00. Bendigo’s multichannel distribution strategy, with community and corporate branches, mobile lenders, white-label loans for mortgage brokers, and online lender Tic:Toc, has seen the bank impressively grow market share in a competitive environment. But, to sustainably grow earnings per share and lift returns on shareholders' equity, the bank must become more efficient. In the five-years to June 30, 2020, net loans increased 17%, net interest income increased 14.5%, and operating expenses increased 19%.