Bendigo and Adelaide Bank has reported a dip in interim cash earnings compared to the prior first-half, primarily due to a contraction in lending. The bank is currently navigating an AUSTRAC investigation related to anti-money laundering controls and also faced a capital penalty from APRA late last year. Bendigo and Adelaide Bank operates as a retail bank, providing a range of financial products and services to individuals and businesses. It also offers wealth management and insurance solutions. Despite these challenges and increased costs, the bank has reiterated its commitment to enhancing shareholder returns, aiming for a return on equity exceeding 10 per cent by 2030.
The bank’s cash profit for the six months ending December 31 totalled $256.4 million, a 3.3 per cent decrease from the corresponding period last year, but up 2.8 per cent from the immediate prior six-month period and ahead of analyst estimates. The fully franked interim dividend remains steady at 30¢ per share, consistent with the previous first-half. A significant investment is being directed towards a financial crime uplift program, projected to span up to three years with an initial estimated cost ranging between $70 million and $90 million. Approximately $15 million of these costs will be absorbed from the current year’s investment budget during the latter half of the year.
Total gross loans experienced a 1.9 per cent contraction over the half-year, with residential lending declining by 2.3 per cent. However, business loans demonstrated growth, and the bank’s digital arm, Up, reported a 27 per cent increase in lending and a 24 per cent rise in deposits. Bendigo Bank expanded its portfolio during the period through the acquisition of RACQ’s loan and deposit book, further shaping its financial performance for the reporting period.
