Big bank theory
New CEO Richard Fennell says Bendigo and Adelaide Bank doesn’t need to be like market leader CBA or the rest of the Big Four, but today's share price plunge suggests investors have their doubts.
The Commonwealth Bank currently has two big drivers in its favour: its own relentless performance; and the constant stream of negative surprises and uncertainty among its nearest rivals.
On Monday, results from Westpac, historically CBA’s closest rival, and regional lender Bendigo and Adelaide Bank both reinforced the hard fact that CBA is not like other banks.
Bendigo and Westpac both revealed cost and margin pressure and ongoing uncertainty in their business. Contrast that with yet another machine-like result from CBA last week, typified by its solid margin and bad debt numbers.
Bendigo’s half year saw statutory profit after tax slump 23.2% to $282.3 million. The key net interest margin fell 6 basis points over the half, hit by higher funding costs to support unexpectedly strong lending. Operating expenses soared 5%.
