Bell Potter analyst TS Lim has upgraded his recommendation of Bendigo and Adelaide Bank (ASX:BEN) from a Hold to a Buy
Bell Potter analyst TS Lim has upgraded his recommendation of Bendigo and Adelaide Bank (ASX:BEN) from a Hold to a Buy. BEN's acquisition of the business and assets of Rural Finance Corporation of Victoria drive our change of recommendation. This includes a $1,695m loan portfolio, 2-3bp upgrades to NIM, associated BDD adjustments and total capital raised of approximately $280m. Incremental earnings net of capital dilution should add 2% to EPS. Following share price movement over the past few days, the expected 12-month shareholder return has increased to over 15%. The positive view is underpinned by the strength and diversity of BEN's funding base, management's ongoing ability to maintain profitable growth in a challenging operating environment, likelihood of a favourable judgement or settlement in the Great Southern proceedings and significant capital to be released following Basel II accreditation (estimated at ~$500m).
Bell Potter Securities is a leading Australian stockbroking, investment and financial advisory firm that provides a comprehensive offering of financial services to a diversified client base that includes individuals, institutions and corporations.