Bendigo and Adelaide Bank has reported an after-tax profit of $180.7 million in the six months to December 2013, down 4.6% from the previous corresponding period.
Managing director Mike Hirst said the result reflected a “low-growth environment”. Australian savings rates have reached record highs since the GFC, with households choosing to pay off debt over riskier investments.
From Bendigo and Adelaide Bank’s investor presentation today:
“We’re seeing low growth due to subdued demand and an increase in people making additional efforts to pay down their debt,” Hirst said. “This is most evident in our mortgage and 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.
“It also means we’re seeing low levels of arrears in the book – a natural outcome of people making additional repayments.”
Hirst said he didn’t expect any significant change in operating conditions for the bank in the near term.