Adelaide Bank Limited (ADB) said Tuesday it expects to deliver a return on equity in excess of 15%, a cost-to-income ratio of 56% and double-digit profit growth in FY04. As a result, the regional Australian bank advised it was on track to lift dividends again this year.
“We’ll comfortably achieve our 15% asset growth target in 2004 and longer term, even with a slowdown, we’re confident we can continue to grow at 15% per annum,” said CEO Mr Barry Fitzpatrick.
Mr Fitzpatrick said the recent interest rate rise and the prospect of more to come would not adversely affect the bank.
"We believe interest rates will continue to rise in an orderly manner over the course of the next year but the rising trends won't have a negative impact on profitability as 80% of our loan book is variable rate."
Mr Fitzpatrick said the latest statistics for the quarter ended September showed its share of mortgage loan approvals rise to 2.5% from 2.1% in June.
“The extra market share translates into an additional $90 million of loan approvals per month,” he boasted.
Mr Fitzpatrick concluded that Adelaide Bank had no plans to increase equity this year financial year in the wake of its $50 million share placement in September.
"We'll utilise securitisation and Tier 2 subordinated debt if further capital is required to fund our growth," he said.
For the year ended June 30, 2003 Adelaide Bank posted a net profit of $51.3 million aided by record home loan lending, lower cost ratios and improved margins. The bank paid a total dividend for the year of 37c, up from 32c.
ADB Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
