Australia's Bendigo year profit up, sees growth

SYDNEY - Bendigo Bank Ltd, Australia's sixth-largest retail bank by market value, posted a 13 per cent rise in annual net profit on stronger lending and deposits, and forecast about 10 per cent growth in 2006 earnings.

Competition among lenders has increased as the housing market has cooled due to higher interest rates and as lenders attempt to woo customers with attractive rates on home loans, deposits and credit cards, while business credit growth has picked up.

Bendigo, which has targetted regional and rural towns considered neglected by the country's big banks, said it planned to open 35 new branches this year and expected better profits from its so-called "community" banks and its bank joint ventures.

"Given reasonable market conditions, we are targetting an increase in cash earnings per ordinary share in the order of 10 per cent this year," said Managing Director Rob Hunt, who has been the top executive at the lender for about 15 years.

This would equate to cash earnings per share (EPS) of about 72.16 cents, up from 65.6 cents for the year ended June 30. Analysts' cash EPS 2006 forecasts range from 70 to 72.2 cents, according to seven broker estimates.

Bendigo, which has targetted regional towns considered neglected by the country's big banks, said net profit climbed to A$90.4 million ($99.52 million) for the year ended June 30. That compared with A$79.8 million for the year-earlier period.

The result was above the average forecast of A$88.9 million, according to Reuters Estimates. Forecasts had ranged from A$83.2 million to A$92 million.

Bendigo began in 1858 in the goldfields of Bendigo, a town in southern Victoria state, and now has more than 275 branches, including "community banks", which are partly owned by investors mainly in regional towns who receive a share of branch revenue.

Community banks have also been set up in cities.

Bendigo said it would pay a final dividend of 26 cents per share, taking the total year dividend up 13 per cent to 45 cents.

Shares in Bendigo, which also owns half of rural lender Elders Rural Bank and Tasmanian state-based Tasmanian Banking Services, rose 4.8 per cent over its fiscal 2005 year, trailing a 21 per cent gain in the benchmark S&P/ASX 200 Index .

A rival regional lender, Adelaide Bank Ltd, whose shares soared 38 per cent over the same period, last month posted a 19 per cent rise in annual net profit to A$81.2 million.

- REUTERS