Why has Bendigo (BEN) outperformed Bank of Queensland (BOQ)?

Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.

Ask a question

The Latest Q&A

Question asked 10/02/2023

Why has Bendigo (BEN) outperformed Bank of Queensland (BOQ)?

Hi James & Team What's your view on the Regional Banks. Frustratingly sold BEN in late Sept 22 ($8.02). Most views were to sell the regionals but BEN has since gone up 26% to $10.20 today. ANZ in that same period up 11%. MMatters sold BOQ in August 2022 around $7.35 now $7.30 . Why has BEN gone up and BOQ remains unchanged? Is there any risk reward in BOQ?? regards Debbie

Answer

Hi Debbie,

The regional banks can be tricky place to invest commonly delivering both amplified under and outperformance. As you say BEN has outperformed because as a business its performed far stronger but we now believe that’s built into the respective share prices.

In December BEN delivered a strong trading update showing cash earnings of $245mn for the 5 months to November 30th, around 15% ahead of consensus estimates, the share price rallied strongly on the beat with NIM (net interest margin) surprising on the upside i.e. BEN’s level of rate sensitivity being greater than the market expected. Conversely BOQ unsettled the market when directors announced they had lost confidence in the CEO after 3 years, another big job for the head-hunters.

at current prices of Bank of Queensland (BOQ) $7.27 and Bendigo (BEN) $10.05 we like BOQ believing they can play some performance catch.
BOQ is forecast to yield strongly over the coming 12 months i.e. 6.6%

chart

Bendigo Bank (BEN) v Bank of QLD (BOQ)

LAST UPDATED 10/02/2023 07:20

Latest Reports

Weekend report 27/04/2024

Weekend Q&A: Strong inflation crushes hopes of a rate cut in 2024

Afternoon report 26/04/2024

The Match Out: ASX (nearly) gives up week’s gain in tough Friday session

The local market dropped ~100 points on the open, failing to see any reprieve following two weaker sessions out in the US since our close on Wednesday. After dropping back below 7600 the index traded in a reasonably tight 30-point range for the rest of the session, failing to join in on the rally across the region and what’s showing on the US Futures ahead of their Friday session. BHP managed to take 31pts off the market alone today, weakness coming after they lobbed an all scrip bid for Anglo American (AAL LN). Despite the soggy end to the week, the ASX200 finished marginally higher, +8pts / +0.11%.