UPDATE 1-Bendigo and Adelaide Bank cuts year forecast
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SYDNEY, April 6 (Reuters) - Australia's Bendigo & Adelaide Bank (BEN.AX) cut its profit forecast for the 2009 financial year Monday as the domestic economy continued to deteriorate and funding remained tight.
Australia's sixth-biggest lender by market value said in a third-quarter trading update that it expected cash earnings of A$205-218 million ($147-157 million), representing 70-75 cents per share and down from an earlier forecast of 83-85 cents a share.
The dividend policy has been maintained at a 60 to 70 percent payout ratio of cash earnings per share, it said.
The global credit crisis and a deterioration in the Australian economy posed short-term negative impacts on parts of the business, it said, though it was well positioned to manage the difficult environment.
Funding remained constrained across the sector, reflected by a significant rise in the cost of retail and wholesale deposits.
Arrears levels in its standard variable mortgage portfolio remained relatively stable, but business lending arrears continued to rise. Its Tier One capital ratio rose to 8.12 percent in the third quarter. ($1=1.398 Australian Dollar) (Reporting by Mette Fraende)
