Bendigo Bank warns on margins, funding costs

From Bendigo Bank:


Not quite the veiled profit warning we got from BOQ but certainly a spinning of the risks…

David Llewellyn-Smith
Latest posts by David Llewellyn-Smith (see all)


    • and its pretty uplifting that with interest rates at 5% a full 43% of borrowers are ahead of their payments…

    • We need a 7% minimum mortgage payment policy. When interest rates are below 7%, the extra goes to principal. When interest rates are above 7% (lol) that’s up to bank / borrower to negotiate. Bottom line is there should be no scope for increased leverage as interest rates fall. Hello APRA…

  1. “She’ll be right” (lol)

    #BREAKING Japan 4Q GDP contracts more than expected
    -1.4% YoY (est. -0.8%)
    -0.4% QoQ (est. -0.2%)
    Private Consumption -0.8%

    We’ve tipped over, I hope everyone’s prepared.

    I woke to the fact Westpac slashed deposit rates today. So I withdrew a very large sum of cash I kept with one of their crony underling organisations.

    Biggest withdrawal in polymer notes I’ve made since mid 08 actually.

    Have a couple of meetings set up tonight, may precipitate further action.

    • I started that on Friday! (like you, probably the first time since the Greek crisis) I figured $20k a day would be okay, but no. I thought they were going to get the rubber hoses out to beat out of me the reason that I wanted the cash. When I said” It’s because I reckon banks are going to stop withdrawals soon” I just got a blank stare and a resumption of “What do you want the cash for?” I asked “What if it is to buy my daughter a car? ” That, apparently is all they wanted to hear.

      • Nice anecdote Janet. It’s like you were doing a rerun of Miss Congeniality.

        “That would be harsher punishment for parole violators, Stan.”
        [crowd is silent]
        “And world peace!”

      • pyjamasbeforechristMEMBER

        It’s an AML red flag – they need a good reason so they don’t have to file the AML paperwork

      • Not sure about NZ but in Australia they need to report a large withdrawal no matter what the reason.

        Under current Federal legislation, all Australian banks are required to report cash transactions of $10,000 or more (or foreign equivalent), including details of the relevant account holders, to the regulator, the Australian Transaction Reports and Analysis Centre (AUSTRAC). From 1 October 2011, new rules are introduced that require banks to collect information, record and report on the identity of anyone performing a cash transaction of $10,000 or more to AUSTRAC.

    • RAMs have done the same thing, saving rate has gone from 3.4% to 3.1%. ME Bank have a savings rate of 3.6%. Thinking of moving over to them as they have deposit guarantee and all.

      • ME Bank have been doing some creative lending recently. Maybe check that out before you move to them.

        I’m not sure of the details but do look into it before you move wads of cash.

        They are a bank and as we know, they are all b*st*ds

      • @Bubbley Is there a way to metrically measure the stability of a bank? Good lending and all that.

      • APRA Stats WARNING: PDF

        ME Bank: $13587m in total loans, of which $8518m (63%) is owner-occupied housing and $4454m (33%) is investment housing.

        No stats for RAMS (not an authorised deposit-taking institution?).

    • Nobody asked questions about withdrawal, was pre-ordered. Although, all I would have said is “none of your concern (smile)”

      Sheesh, no wonder Japan went negative. Persistent underconsumption is like the snapping sound of an Achilles heel.

      • The snapping sound of the Achilles heel reminds me of the Elephant story:
        You will all know the story of a Soviet statistics professor in World War II who refused to go to the bomb shelter during the German air raids. “There are seven million people in Moscow,” he would say. “Why should a bomb pick him, specifically, out of that crowd?” Then one night he showed up in the shelter. “There are seven million people in Moscow,” he explained, “and one elephant. Last night they got the elephant.”

    • pyjamasbeforechristMEMBER

      Weird – I would have thought they would be fighting for deposits now that their wholesale funding is 1/3 the way to the moon.

    • Ortega, I heard a rumour from an IB sell sider today that RMBS markets are closed. Have you heard anything about this?

  2. @ Craftsman

    ME bank, whilst largely an internet based bank, still have/had a few physical offices. I was going to go with them until I learnt they were in the process of shutting all of their branches. (I prefer the recourse of being able to go into a branch if they won’t do something over the phone e.g. give you your money).

    • If there is no phyiscal branch, does that mean you’re limited to only ATM to get your money out?

      • I didn’t look into things that much. I presume you transfer funds to another institution or utilise ATMs affiliated with other banks ATM network. I know the 3.6% interest offering is contingent upon making some tap and go purchases on their credit/debit card.

        I asked them on the phone about getting bank cheques made up. They said they could arrange on the phone and mail to you within a few working days. Not good enough in my opinion.

  3. What is the safest way to store cash? I am withdrawing about $130 000 and do not have a safe in my house etc.

    Are there any things i should do to ensure the polymer notes do not breakdown and deteriorate if i decide to bury it somewhere? There is always the possible risk of a fire burning one’s house down etc.

    Any suggestions on ensuring the health of such cash if buried in the ground ?

      • No, thats mad. Just hold onto the bank withdrawal receipt. The law cannot prevent you from paying for everything in cash from here-on-in. (not yet anyway)

        Jeez. Glenny, do you see what the world is coming to? Do you see where this is going? Japan is crashing, the experiment in mass-money-manufaturing is dead. Dead-a-rino. And that deeply primal swooooooshing noise you hear is coming from the growing number of bat-shit-furious depositors contemplating (and increasingly acting on) withdrawing cash.

        The biggest lie in Aus finance today is that our banks are in ‘good shape’.

        I remember Bernank and Greenspans delusional musings. Very calm. Very wrong.

        I remember.

      • “Just hold onto the bank withdrawal receipt.”

        I’d definitely hold on to that. Will help answer any questions if/when you decide to redeposit the money.

      • Today's Empire Tomorrow's Ashes

        Ortega, loving your posts.

        So….as someone with a mortgage (who sticks spare cash into paying off principal), and not much cash, but with some other investments (gold etc), there’s not much to be done, eh?

    • The polymer notes are pretty tough – I’d be surprised if you need any special storage arrangements for them. But I certainly wouldn’t feel comfortable storing $130,000 in cash anywhere except a safety deposit box.

      Have you thought about Australian government bonds if you don’t trust the banks? There’s absolutely no way that the government is going to default on AUD-denominated bonds.

    • YOu need a short length of 100 nb PVC tune from Bunnings about 400 long
      PVC Glue a cap on one end. Place your cash in the tube.
      orient the tube so the cap is uppermost and the tube vertical
      Fill the tube from the lower end with party balloon gas (helium) comes in low cost aerosol type containers
      Coat the inside of a cap with Vaseline and place on the lower end
      Bury the tube vertical, Glued end uppermost.
      Repeat the helium procedure if you open the tube afterwards.

    • No matter what you do, don’t store it in the freezer. That is the place most people believe is safest, and also the first place the thieves will look.

    • Lots of hundreds put into a capped and duct-taped pvc pipe and buried somewhere.
      That’s what I’ve heard of both drug dealers and pensioners doing to keep their money out of the government’s gaze.

  4. After AB’s suggestion concerning austrac/reporting suspicious matters it does seem likely the banks will report such a withdrawal. That’s cool. I have nothing to hide.

    I will just tell authorities i got burnt in the GFC and i am not letting that happen again. So F$#@% off.

    Prevention is better than cure

    • Yeah, they’ll definitely report the transaction but I wouldn’t worry about that if you’re not up to anything dodgy. Just don’t expect to be able to take it to the casino, increase it ten-fold, and the deposit it all in cash without any questions. 😉

  5. BENs entire earnings growth for the half is homesafe revaluations. It’s not even income. If they are this good at property investment they should stop banking, cut out the middle man, and bet the entire book on property.

  6. “Melbourne will soon have Australia’s tallest skyline, with more than 100 skyscrapers higher than 100 metres planned or already under construction.”

    And we LAUGH at China’s ‘ghost cities’ and empty ‘pentagon’ shopping centres! (and by extension their ‘ticking time bomb’ banking sector):

    Straya. No ticking time bombs here!


      The Skyscraper Index is a whimsical concept put forward by Andrew Lawrence, a property analyst at Dresdner Kleinwort Wasserstein in January 1999,[1][2] which showed that the world’s tallest buildings have risen on the eve of economic downturns.[3] Business cycles and skyscraper construction correlate[4] in such a way that investment in skyscrapers peaks when cyclical growth is exhausted and the economy is ready for recession.[5] Mark Thornton’s Skyscraper Index Model successfully sent a signal of the Late-2000s financial crisis at the beginning of August 2007.[6][7]