Regional lender Bendigo and Adelaide Bank is blaming a low-growth environment for a slide in half-year profit.

Net profit for the six months to the end of December came in at $180.7 million, which is down 4.6 per cent on the prior corresponding period.

Cash earnings though, which is the bank’s preferred measure, rose 9.5 per cent to $185.9 million.

The company’s managing director Mike Hirst says the mixed result is due to a reluctance by households to borrow money.

“We’re seeing low growth due to subdued demand and an increase in people making additional efforts to pay down their debt,” he told shareholders.

“This is most evident in our mortgage and our rural bank portfolios.”

Mr Hirst says while this affects the bank’s bottom line there is a silver lining in a reduced level of bad debts.

“We’re seeing low levels of arrears in the book – a natural outcome of people making additional repayments,” he added.

Mr Hirst says the bank is now entering a new growth phase after years of diversifying and acquisitions.

“We’ve moved from consolidation to strengthening and now we’re entering an investment phase,” he said.

Bendigo and Adelaide’s boss says he does not expect any significant bumps ahead.

“Things should remain stable, although I expect the focus of competition to shift from deposits to assets,” he concluded.

Shareholders will receive an interim dividend payment of 31 cents a share, fully-franked, payable on March 31.