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Bendigo and Adelaide Bank customers are repaying their home loans too quickly for the bank’s own good.
Managing director Mike Hirst said the bank had experienced low levels of arrears in its loan book for the six months to 31 December 2014 – but that this good result had come at a cost.
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“We’re seeing low growth [throughout the group] due to subdued demand and an increase in people making additional efforts to pay down their debt,” Mr Hirst said.
“This is most evident in our mortgage and our Rural Bank portfolios. While this impacts the bank’s growth, this is fantastic for our customers as they’re building equity and greater financial wealth.”
The bank posted half-yearly revenue of $707.6 million, an 8.7 per cent increase on the previous year. However, net profit fell 4.6 per cent to $180.7 million.
Loans under management climbed by 2.8 per cent to $51.9 billion. New loan approvals jumped 11.2 per cent to $7.6 billion, with two thirds of those approvals coming in the residential sector.
Mr Hirst said the strong growth in loan approvals had been driven by an increase in the bank’s customer base.
The bank had upgraded its third-party lending systems in the first half of the financial year, he added..
