Mike Taylor Money Management 8 July, 2013
While investors have seemed reluctant to significantly re-embrace structured and leverage products, Bendigo and Adelaide Bank has announced it is lifting its investment in its margin lending business.
The banking group announced today it would be backing this increased investment into margin lending in the leveraged equities space with the appointment of its current head of Wealth Market, Alexandra Tullio, to a new, more-focused position, and via the employment of key new staff.
Confirming the move, Bendigo and Adelaide Bank managing director Mike Hirst said it was moving to increase investment in leveraged equities "as it sensed an improvement in investor sentiment would flow through to increased borrowings".
"Leveraged Equities has just completed a very successful campaign for customers who wish to prepay the interest on their loans," he said.
"The result highlights the fact that we may well have seen the bottom of the market for the margin lending sector," Hirst said. "The reality is that the sector has experienced a downturn over the last few years, as a direct result of the Global Financial Crisis, and we have been managing our business in the context of falling revenues, as has every other player in the market.
"Taking a line through the prepaid campaign, we may be about to enter an upturn in the margin lending business cycle, as we are seeing some signs of a return in investor risk appetite," he said. "Although it is early days yet, it does seem that the time is right to invest further in the margin lending business to ensure we are not late-comers to the opportunity."