Bendigo and Adelaide Bank managing director Mike Hirst said the profit increase resulted from “disciplined management” of its margin and balance sheet.
Mr Hirst said the bank has also taken significant steps to strengthen its capital base and funding capacity.
“Our capital raisings were well supported by institutional and retail investors,” he said. “Investors recognise that our strategy is consistent and focused, and we are intent on growing the business profitably.”
According to Mr Hirst, Bendigo the group has also been focused on writing quality business which he said is reflected in the bank’s credit performance.
“We have a few large exposures we have needed to provision, but our arrears are trending downwards,” said Mr Hirst.
“Nevertheless, our collective provisions have increased year on year.”
The profit announcement also follows the recent settlement of the Great Southern class action brought against Bendigo and Adelaide Bank, as reported by InvestorDaily in July.
Participants in the class action acknowledged their loans were valid and enforceable and agreed not to undertake further litigation action against the bank.
Bendigo and Adelaide Bank did, however, agree to waive unpaid interest in relation to overdue amounts.
“We always maintained the bank’s conduct was appropriate and that we are entitled to be repaid the monies loaned to Great Southern borrowers,” said Mr Hirst.
While the acquisition of Rural Finance Corporation increased the group’s agribusiness capabilities, Mr Hirst said it did not contribute to the profit result.
