While the ASX Bank stocks have largely performed well, two high quality dividend paying stocks belonging to leading Australian banks have reached new highs. These top growth stocks are
Bendigo and Adelaide Bank Limited (ASX: BEN)
Bendigo and Adelaide Bank Limited (ASX: BEN) has entered the new Financial Year, building on significant transformations over the past 12 months. The bank’s capital levels remain robust, with a Common Equity Tier 1 ratio of 11.32%, well above regulatory requirements. For FY24, the bank posted cash earnings of $562 million and a return on equity of 8.18%, despite a weaker first half. They also achieved a 3.3% increase in dividends for shareholders. This growth comes alongside a strong focus on efficiency, with cost growth, excluding investment, kept below inflation. A key achievement was reducing the number of customer-facing brands and core banking systems, as well as dramatically improving home loan application approval times.
The bank's commitment to customers remains a core priority, with customer numbers growing 9.1% to reach 2.5 million, and trust scores leading the industry. Bendigo Bank was named Australia’s most trusted bank for the 10th consecutive quarter. The Voice of the Customer program, launched to gather regular insights, will further strengthen customer relationships and improve satisfaction. Digitally, the bank made significant strides with its Bendigo Lending Platform, which has sped up home loan approvals to under six minutes. While they continue to expand their digital capabilities, the bank remains dedicated to its physical branch network, which is the fourth largest in Australia. These branches ensure a personal touch that enhances the customer experience.
Bendigo and Adelaide Bank’s strategy will continue to focus on leveraging its unique strengths, such as its trusted brand, regional presence, and community connection. The bank will continue to streamline its operations, invest in digital capabilities, and stay customer-first focused. It plans to continue expanding its digital services while preserving the value of face-to-face interactions at its branches. The bank will also focus on accelerating growth by investing in areas that drive productivity and sustainable growth, including improving its risk and compliance frameworks. With plans to increase investment spend in FY25, the bank aims to reduce complexity and further enhance its capabilities for long-term success.
Westpac Banking Corporation (ASX: WBC)
Westpac Banking Corporation navigated a challenging year marked by below-trend economic growth in Australia and New Zealand, influenced by higher interest rates, elevated living costs, inflationary pressures, and geopolitical uncertainty. Despite these headwinds, the bank maintained a strong balance sheet and delivered a steady financial performance.
Statutory profit after tax declined 3% year-on-year to $7.0 billion, with a return on tangible equity (ROTE) of 11%, still comfortably exceeding the cost of capital. Westpac’s capital strength enabled the announcement of $2.0 billion in additional capital returns through share buybacks, following a $1.5 billion buyback earlier in the year, and a $500 million special dividend—the first such dividend since 2013, set at 15 cents per share in the First Half of 2024. Ordinary dividends also increased 6% year-on-year to $1.51 per share, fully franked, with a final dividend of 76 cents per share. This reflects a payout ratio of 73% of profit after tax (excluding notable items). Combined with share price accretion, these actions drove a total shareholder return of 58% for FY2024. In September, the Board announced Anthony Miller as the incoming Managing Director and CEO, effective December 2024. Miller brings extensive banking experience, a strong customer focus, and a deep understanding of the Australian market, positioning him to guide Westpac into its next strategic phase.
Strategically, Westpac remains focused on core banking markets, leveraging a strong capital and risk management foundation to pursue sustainable growth. Investments in the Business & Wealth and Westpac Institutional Bank (WIB) segments include product enhancements, improved digital transaction services, and operational resilience. The bank is also integrating AI technologies to optimize operations and service delivery, carefully piloting test cases to manage associated risks. The long-term transformation project, UNITE, remains central to the bank’s strategy, with a focus on balancing its completion within four years while continuing to prioritize core business investments. The completion of the Integrated Plan under CORE has further strengthened governance, culture, and risk management, setting a foundation for ongoing improvements. While economic growth is expected to remain below trend, there are early signs of modest recovery. Westpac’s strong capital position and strategic initiatives leave it well-placed to navigate the current environment and support sustainable shareholder returns. Management continues to focus on cost discipline, talent acquisition, and sustainability, aiming to solidify its position as a leading institution in the Australian banking sector.
Source: Company’s Report
Veye Pty Ltd(ABN 58 623 120 865), holds (AFSL No. 523157 ). All information provided by Veye Pty Ltd through its website, reports, and newsletters is general financial product advice only and should not be considered a personal recommendation to buy or sell any asset or security. Before acting on the advice, you should consider whether it’s appropriate to you, in light of your objectives, financial situation, or needs. You should look at the Product Disclosure Statement or other offer document associated with the security or product before making a decision on acquiring the security or product. You can refer to our Terms & Conditions and Financial Services Guide for more information. Any recommendation contained herein may not be suitable for all investors as it does not take into account your personal financial needs or investment objectives. Although Veye takes the utmost care to ensure accuracy of the content and that the information is gathered and processed from reliable resources, we strongly recommend that you seek professional advice from your financial advisor or stockbroker before making any investment decision based on any of our recommendations. All the information we share represents our views on the date of publishing as stocks are subject to real time changes and therefore may change without notice. Please remember that investments can go up and down and past performance is not necessarily indicative of future returns. We request our readers not to interpret our reports as direct recommendations. To the extent permitted by law, Veye Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss, or data corruption) (as mentioned on the website www.veye.com.au), and confirms that the employees and/or associates of Veye Pty Ltd do not hold positions in any of the financial products covered on the website on the date of publishing this report. Veye Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services.