2 Australian banks report better than expected profits

Bendigo and Adelaide Bank's profit increases as investor confidence on regional banks rebounds.

Bendigo, the Victorian-based regional bank recorded a first-half net profit of A$104.1 million (US$93.77 million), more than double its A$50.6mln (US$45.58mln) for the same time last year.

The cash profit, which strips out volatility, rose 24 percent to A$139.7mln (US$125.83mln) and Bendigo declared a 28c interim dividend, beating the market consensus of 22c.

The profit rise was attributed to bad and doubtful debts falling from A$25.5mln (US$22.97mln) a year ago to A$16.8mln (US$15.14mln) in the first half, and the net interest margin rising to 2.09 percent.

The bank said its margin had increased to 2.27 percent in the final few months of the half, and would remain at that level for the current six months. Bendigo chief executive Mike Hirst said securitisation markets had started to improve, which gave investors confidence the regional banks would soon be better placed to compete with the top four, according to traders. "While it's too early to declare that securitisation markets have recovered fully, there are promising signs for the future of this market," he said.

View the full story in the Australian.