Bendigo (ASX: BEN) rolls over, should you buy this ASX 200 stock?
Stock
Bendigo (ASX: BEN) $10.68 as at 11/02/2019
Event
The regional bank has slumped today, taking other financial stocks with it on a soft first half result. Bendigo has missed on expectations, as costs rise and income falls – BEN missing expectations by ~2% at the profit line.
Bendigo was hoping to see loan growth in the face of the Royal Commission but in the end saw the loan book shrink over the half and revenues fall by around 1%. Mortgages might have grown, but a measly 2.7% growth there was more than offset by the slump in commercial lending.
Net Interest Margin (NIM), the difference between what the bank pays for funding vs the rate it loans out to you and I, fell 3bps between the 2nd half of 2018 and this 1H19 – not a trend you see often with a shrinking loan book.
To add to the woes of the result, costs continue to skyrocket, up 8% from the 6 months prior as the bank struggles to grow. The only positive of the update was a continued slide in bad debts, yet this wasn’t enough to cover the impact of rising costs on falling revenue.
Bendigo (ASX: BEN) Chart
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Bendigo Bank (BEN)[/caption]
Market Matters Take/Outlook
