Bendigo Bank just issued a profit warning and its shares are tanking

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Shares in Bendigo and Adelaide Bank fell after the regional bank said it had to “slam on the brakes” in investor and interest-only lending.

At the close, the shares were down 4.7% to $11.38.

Managing director Mike Hirst told the bank’s AGM that macroprudential actions from regulator APRA have forced banks to slam on the brakes in investor and interest only lending.

“While that reaction was necessary to ensure we hit the APRA targets in the time frame we were given, it has meant some of the growth momentum we experienced in the year just gone has been interrupted,” he said.

He expects balance sheet growth to be relatively flat in the first half.

“Another factor challenging the industry is the area of fees and charges, with the recent example of the removal of foreign ATM fees by some of the larger players in the industry being a case in point,” he says.

“These changes will have a negative impact on all banks’ fee income and we are not immune.”

Hirst expects minimal increases in costs of about 2% compared top the same half last year.

UBS reacted by downgrading earnings per share forecasts by 6% to $0.84.

“BEN has a strong customer offering,” UBS wrote in note to clients. “However we believe its growth outlook remains challenged and highly sensitive to competitive forces.”

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