Stock To Watch!! Adelaide Bank

Sydney - Monday - September 2: (RWE)
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REGIONAL BANK CONTINUES TO DELIVER


Overview
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Regional bank Adelaide Bank (ADB) announced another strong
result last week, with net profit up almost 21 per cent to $41.1 million
for the year ended June 30 2002.
The bank's profit surged 25 per cent to $37.5 million for the
six months ending March 31 2002.
The better-than-expected result came on the back of strong
contributions across the board led by strength in home lending, stable
margins, solid cost management and impressive growth in fee income.
Adelaide Bank expanded its residential lending 76 per cent to
$4.25 billion.
The bank pulled its cost-to-income ratio below 60 per cent for
the first time.
Net interest income grew to $128.8 million for the 2002
financial year from $118.7 million in the previous corresponding period,
in line with the increase at other banks.
While non-interest income was 17 per cent stronger on the back
of better-than-expected loan fees growth.
Analysts welcomed the result, with Shaw Stockbroking reaffirming
its "buy" and "long-term outperform" ratings on the stock.
"The outlook for Adelaide Bank remains favourable," Shaw said in
a bullish note to clients.
"Adelaide Bank is expected to continue to record sound double
digit earnings growth moving forward," the broker said.
The bank's traditional banking operations were expected to
continue to post strong growth albeit at a slower pace than in the
recent past due to a forecast slowdown in home lending as the housing
market cools off.
Adelaide Bank announced a final dividend of 18c a share, taking
the full-year 2002 dividend to 32c a share - up 6.7 per cent on the
previous corresponding period.



Share Details
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Last price: $7.50
High/Low for year: $7.68/$5.50
Dividend yield: 5.905 per cent
P/E ratio: 15.92



Background
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Adelaide Bank Ltd provides financial services in South Australia
with small lending operations throughout the rest of Australia.
The bank's lending mix in SA focuses primarily on the
residential sector with smaller allocations to the business and consumer
market.
Adelaide Bank continues to implement a strategic plan adopted in
1995.
The core components are the growth of franchises in SA and
expansion into interstate niche markets.
As part of this strategy the bank's objective is to diversify
its lending operations both geographically and by industry.
Adelaide Bank has established strategic alliances with
Prudential and NZI Australia Insurance to expand distribution channels
for its product range while increasing its fee income through the
provision of insurance products for customers.
ENDS