Bendigo and Adelaide Bank (BEN) H2 2025 earnings summary

Executive summary

• Full year cash earnings were $514.6 million, down 8.4% year-on-year, with income slightly lower due to non-interest income declines and higher funding costs in the first half.

• Customer base grew 11% year-over-year to 2.9 million, with NPS +36.4 above industry average.

• Strategic focus shifted to balanced lending growth, margin management, and digital investments, stabilizing margins despite a falling cash rate environment.

• A goodwill impairment of $539.5 million was recognized, primarily due to changes in discount rates and global uncertainty.

• Launched 2030 strategic plan focused on digital, efficiency, and customer relationships.

Financial highlights

• Total income was $1,946.6 million, down 0.4% year-over-year.

• Net interest income for the half rose 1.1% sequentially, with total income up 0.2% on the prior half.

• Net interest margin (NIM) was flat at 1.88% in 2H25, with repricing actions offsetting cash rate headwinds.

• Operating expenses increased 7.7% year-on-year to $1,209.4 million, mainly from investment spend and inflation.

• Dividend declared at $0.33 per share, fully franked, with a payout ratio of 74.8%.

Outlook and guidance

• Targeting ROE above 10% by 2030, with dividend payout ratio of 60–80% of cash earnings.

• BAU cost growth to be contained at or below inflation through the cycle, with productivity improvements offsetting amortization headwinds.

• Investment spend expected to remain flat in FY 2026, with a shift toward digital and productivity initiatives.

• Expect improved Business & Agribusiness growth and savings growth above system in FY26.

• Residential loan growth expected at or around system average, funded mainly by lower cost deposits.