Why is the Bendigo Bank share price dipping on Monday?

Bendigo Bank shares are falling today. But it's for a good reason…

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Key points

  • The ASX 200 has had a pleasing start to the trading week.
  • But the Bendigo Bank share price hasn't been invited to the party
  • What's up with this ASX 200 bank on Monday?

It's been a pleasing start to the trading week for the S&P/ASX 200 Index (ASX: XJO) so far this Monday. At the time of writing, the ASX 200 has gained a tentative 0.09% and is back over 6,830 points. But we can't say the same for the Bendigo and Adelaide Bank Ltd (ASX: BEN) share price.

Bendigo Bank shares closed at $8.97 each last week. But today, the ASX 200 bank share opened at $8.76, and is now going for $8.69 each. That's a hefty loss of 3.1% so far.

So why are Bendigo Bank shares underperforming the ASX 200 so comprehensively today?

Well, luckily for investors, it's because Bendigo Bank shares have just traded ex-dividend for the bank's upcoming final dividend payment.

Bendigo Bank share price drops as bank trades ex-dividend

As we flagged last week, Bendigo Bank is scheduled to fork out its final dividend for FY22 later this month on 29 September. But because the bank is trading ex-dividend today, only investors that held Bendigo Bank shares before this trading session are eligible to receive Bendigo Bank's final dividend.

When an ASX share trades ex-dividend, all new investors are cut off from receiving the said dividend payment. As such, we normally see the value of this dividend leave the company's share price. That's because its value is now lost to new investors. This is what is happening to Bendigo Bank shares today.

Bendigo Bank shareholders can now look forward to receiving Bendigo Bank's final dividend of 26.5 cents per share, fully franked, later this month.

This latest dividend payment will bring Bendigo Bank's total dividends for FY22 to 53 cents per share. That follows on from the interim dividend of 28 cents per share investors received back in March. This represents a small drop from the previous financial year's dividend total of 54.5 cents per share.

At the current Bendigo Bank share price, this ASX 200 bank share now has a dividend yield of 6.09%.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Bendigo and Adelaide Bank Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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