UPDATE, 1.45PM: Customers could pay the price for a home loan market that is too hot, a bank boss says as her group waits in the shade.
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Too many financial institutions are offering "cash-back" loans to entice new customers, including big four banks, Bendigo and Adelaide Bank managing director Marnie Baker says.
"I don't think it's always necessarily the right thing for customers," she said.
"Our customers should be able to choose the products that are right for them. We've seen some examples of them taking these sorts of cash-backs and being worse off in as little as two years."
The Bendigo Bank is one of the few institutions that have avoided using such tactics to grow its customer base, Ms Marnie told the Advertiser after releasing its mid-financial year results on Monday morning.
The bank is sticking with a more conservative approach as cost of living pressures rise throughout Australia.
Most of its customers are ahead on loan repayments but 16 per cent lack a buffer in a period when the Reserve Bank of Australia expects to keep raising interest rates.
"We are monitoring those cohorts that may come under pressure and we have got teams speaking to them if they find they are coming under challenges," Ms Baker said.
That does not mean the bank is not competing for new customers.
Ms Baker has told shareholders a network of 302 community-owned banks linked to her organisation had brought in about $10 billion in net funding.
She said the wider group was "well positioned" to perform and was growing its market share.
Bank reveals strong results, concerns over cost of living issues
EARLIER: The Bendigo and Adelaide Bank will wait until inflation is back under control before making long term predictions about the economy, its boss has told the Australian Stock Exchange as she releases mid-year results amid high inflation.
Managing director Marnie Baker is reluctant to gaze too far into the crystal ball but does expect interest rates to peak or plateau this year.
She is waiting until the Reserve Bank of Australia reins inflation back in but has delivered an optimistic assessment of what it will mean for her group in comments coinciding with the release of her group's mid-year results.
Two fifths of borrowers remain one year ahead on repayments and a third two years in front, Ms Baker said.
"We have seen very little deterioration in these numbers with 84 per cent of home loan customers maintaining a financial buffer," she said.
It is "reasonable" to expect house prices to keep moderating, Ms Baker said.
That could slacken some demand from borrowers but she said her banking group was "well positioned to perform" against others.
It has delivered a $249 million statutory net profit and has told shareholders to expect a 29 cent fully franked dividend.
They are strong results, Ms Baker said.
"We also recognise the very real challenges some people are facing given the increased cost of living pressures driven by inflation and increasing interest rates," she said.
"We will continue to be there, to support our customers when they need us, as we have always done."
More to come.
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Tom O'Callaghan
I grew up in Bendigo and I want to tell your stories.
I grew up in Bendigo and I want to tell your stories.
