Bendigo and Adelaide Bank (BEN) investor relations material

Executive summary

• Cash earnings after tax were $256.4 million, up 2.8% sequentially but down 3.3% year-over-year, with statutory profit after tax at $230.6 million, up 6.4% year-over-year, driven by higher net interest income and digital growth.

• Customer base neared 3 million, with NPS +24.9, and digital bank Up achieved profitability ahead of schedule.

• Operating expenses rose 4.2% half-on-half and 6.4% year-over-year, but Q2 expenses were 6.4% lower than Q1 due to productivity gains and FTE reduction.

• The bank self-disclosed AML/CTF deficiencies, leading to an AUSTRAC enforcement investigation, a $50 million APRA capital overlay, and a comprehensive remediation program estimated at $70–$90 million over three years.

• Agreement to acquire RACQ Bank’s loan and deposit books, expected to add 90,000 customers and expand Queensland presence, subject to regulatory approval.

Financial highlights

• Total income for 1H26 was $1,009.9 million, up 3.7% half-on-half and 3.9% year-over-year; net interest income rose 4.4% year-over-year to $871.1 million, with NIM up 4 bps to 1.92%.

• Cash earnings after tax were $256.4 million, with statutory earnings at $230.6 million; dividend per share was 30c, fully franked, with a payout ratio of 66%.

• Operating expenses (cash basis) rose to $636.5 million, with cost to income ratio at 63.0%.

• Net credit write-back of $2.4 million, with impaired assets at 0.15% of loans.

• CET1 ratio at 11.37%, up 37 bps half-on-half and 20 bps year-over-year; liquidity coverage ratio at 135.3%.

Outlook and guidance

• Targeting ROE above 10% by 2030, with a dividend payout ratio of 60–80% of cash earnings and BAU cost growth not exceeding inflation.

• Residential loan growth expected to return to system levels in the near term; improved business and agribusiness growth in FY26.

• NIM expected to face slight pressure as lending volumes improve and competitive dynamics influence deposit and funding costs.

• AML/CTF remediation program to cost $70–$90 million over three years, with $15 million in H2 FY26.

• Credit costs expected at 5–8 bps of loans through the cycle.