Sydney - Monday - September 2: (RWE) ------------------------------------
REGIONAL BANK CONTINUES TO DELIVER
Overview --------
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 -------------
Last price: $7.50 High/Low for year: $7.68/$5.50 Dividend yield: 5.905 per cent P/E ratio: 15.92
Background ----------
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
ADB Price at posting:
0.0¢ Sentiment: None Disclosure: Held