Bendigo and Adelaide Bank Shares Climb Nearly 4% as Weak Jobs Data Cools Rate Hike Bets Ahead of AGM

SYDNEY — Shares of Bendigo and Adelaide Bank rose nearly 4% on Thursday, joining a rally in regional bank stocks after weaker-than-expected Australian employment data cooled expectations of further interest rate increases.

Bendigo shares closed up 39 Australian cents, or 3.81%, at 10.62 dollars, the session's high. The stock had traded as low as 10.26 dollars earlier in the day. Volume was strong, at more than 3 million shares, well above the stock's recent average.

The regional lender has a market value of about 6.2 billion dollars.

Jobs data shifts outlook

The gain came after the Australian Bureau of Statistics released September employment figures pointing to softness in the labor market, including a sharp drop in part-time employment.

The data led traders to scale back bets on another interest rate increase by the Reserve Bank of Australia, which has raised rates four times this year. Australian government bond yields fell sharply after the release.

Signs of easing pressure on interest rates can reduce concerns about loan defaults and support the outlook for banks, particularly smaller lenders more exposed to households and small businesses.

Regional bank rally

Bendigo's rise came on the same day that rival Bank of Queensland jumped more than 5% after reporting full-year results showing improving momentum in the second half, including a stronger net interest margin. The results appeared to lift sentiment across regional lenders.

Bendigo did not release any company-specific news on Thursday.

A tough year

Despite Thursday's gain, Bendigo shares have struggled, falling about 17% over the past year. The stock has traded between roughly 9.81 and 13.11 dollars over the past 52 weeks.

In August, the bank reported full-year cash earnings up 3% to 530 million dollars. Second-half earnings rose 7.7% to 273.8 million dollars, and the bank's net interest margin, a key measure of lending profitability, improved 7 basis points to 1.98%.

However, the shares fell after the results as investors focused on rising cost pressures facing the bank.

Australia's fifth-largest retail bank

Founded in 1858 as the Bendigo Building Society, Bendigo and Adelaide Bank is Australia's fifth-largest retail bank, with nearly 2 million customers. It operates under brands including Bendigo Bank, Up and Rural Bank and is known for its Community Bank model, which allows locally operated branches to share earnings with their communities.

The bank has positioned itself as an alternative to the four major banks, which dominate the Australian market.

Income appeal

Bendigo has been popular with income investors, offering a dividend yield of about 6%. The bank pays two fully franked dividends each year, typically in March and September.

What's next

Bendigo is expected to hold its annual general meeting later this month, where investors will look for an update on trading conditions, cost management and the outlook for lending growth.

The direction of interest rates will remain a key factor for the bank's shares, with further economic data and the Reserve Bank's next decision likely to influence sentiment toward Australia's lenders.