"Growth at profitable prices" has been the mantra of Bendigo Bank chief executives, and below system growth has been the result.Bendigo is not too far off system in most product categories, and this might be a wise choice for an entity straining to produce better returns.The adequacy of those returns was in the spotlight at the bank's profit briefing yesterday.A UBS analyst questioned the rationale and sustainability of the dividend payout when it was strong growth in Homesafe values, thanks to Sydney and Melbourne property price growth, that was the real profit driver.Homesafe is an equity release scheme that allows people to raise funds by contracting to sell a share of the future sale proceeds of their home.Credit Suisse analysts questioned organic capital generation capacity. Dilutive capital raisings to maintain growth in risk-weighted assets seems necessary to maintain the present model.Decent margin management informed mainly by reduced liability costs propped up the June 2014 annual profit of A$372 million, up six per cent. The cash profit Bendigo put at $382 million, up ten per cent.The final fully franked dividend is 33 cents, up two cents up on the interim dividend, lifting the full-year dividend by three cents to 64 cents per share, or five per cent more.Standard & Poor's summarised the result as "primarily driven by lower funding costs and the bank's disciplined approach to pricing its lending."[This] helped increase the net interest margin five basis points to 2.24 per cent."While Bendigo looks to be competitive with its lending rates, the bank is not aggressive in its pricing relative to some low-cost providers, seeking instead to leverage its retail brand and network."Bendigo Bank's chief executive Mike Hirst expressed confidence that most borrowers with long disputed loans related to Great Southern forestry schemes would repay them, if need be by refinancing with the bank.Most of these borrowers have high incomes or significant assets, Hirst said.Bendigo has stayed collection activities on the loans for one more month pending court approval of the settlement of a protracted class action.Agribusiness operations remain a weak profit earner, with diminished values on Queensland cattle properties dragging on the result.Bendigo acquired Rural Finance Corp of Victoria for $1.78 billion on July 1, 2014.Building liquidity for this asset refinancing bore down on the margin in the last quarter of the year.S&P put the lending story this way: Bendigo "achieved housing lending growth of six per cent on an annualised basis in the six months ended June 2014, up from 2.5 per cent in the first half. System growth is seven per cent."Like other retail lending institutions, Bendigo "remains susceptible to the competitive strength of the major banks, particularly with respect to their funding and operating efficiency advantages," S&P said.