Bendigo and Adelaide Bank (Bendigo) yesterday left shareholders with a flat dividend even though cash earnings surged 72.8 per cent.
The interim dividend of 28 cents for the six months to December 2008 was unchanged from the previous corresponding period.
The move followed Commonwealth Bank of Australia last week keeping its dividend flat for the first time in over a decade.
Bendigo's cash earnings jumped to $122.2 million for the December half from $70.7 million in the prior corresponding period.
"This result was achieved and delivered in a changing and challenging time for banks," Bendigo and Adelaide Bank managing director Rob Hunt said.
"Our determined and disciplined approach to writing sustainable and profitable business has placed the group in the best possible position to manage these market challenges."
The lender's total provisions and reserves for doubtful debts grew to $156.9 million in the period, an increase of $21.8 million from June 2008.
Bendigo's retail deposits from the wealth, high net worth and corporate space slipped 6.2 per cent to $7.5 billion.
During the period, the bank's Leveraged Equities margin lending unit agreed to buy Macquarie Group's $1.5 billion portfolio of margin loans for a premium of $52 million.
The purchase helped vault Bendigo's active customer base to over 31,000, from under 18,000 at the end of December 2008.
The margin lending business withstood the recent market volatility to remain in excellent shape, the bank said. Despite record margin call activity, there were no provisions or losses in this business for the period.
Bendigo's shares slumped 54 cents or 5.7 per cent to $8.94 in trading yesterday.
