Payments gummed up at Bendigo

Past due loans built quickly over the March 2010 quarter at Bendigo and Adelaide Bank, with the level of such loans classed as "other retail" rising by $115 million, or more than 60 per cent, to $364 million over the quarter.

Most likely the continuing repayment strike by investors in loans connected to failed, tax-advantaged, agribusiness investment schemes is the cause of the rise, and the only real wrinkle in the "pillar 3" report for the bank published yesterday.

The bank is already defending one class action relating to loans provided by the now failed Great Southern group and funded by Bendigo. At least one more class action is in the works.

Home loans 90 days or more past due increased by 17 per cent to $179 million over the three months to March 2010, a sign of the rising trend in home loan arrears becoming common across the industry.