Bendigo Bank’s 2025 Performance: Digital Success Amid Financial Headwinds

Financial Performance and Market Position

Bendigo and Adelaide Bank (ASX:BEN) has reported cash earnings of $514.6 million for the year, marking an 8.4% decrease, alongside a statutory net loss after tax of $97.1 million, primarily impacted by goodwill impairment.

Customer Growth and Digital Transformation

The bank has demonstrated remarkable customer growth, with an 11% increase to 2.9 million customers over the year, outpacing both major and regional banks. Notably, their digital bank Up has experienced substantial growth, expanding by 29% to reach 1.2 million customers, now representing over 40% of Bendigo Bank’s customer base. Up’s success is validated by its impressive Net Promoter Score of +55.2.

Operational Improvements and Strategic Initiatives

The bank has made significant strides in enhancing its digital capabilities, implementing the Bendigo Lending Platform across its broker network and retail operations. In a move toward simplification, they have reduced their core banking systems from three to two, retired the Rural Bank brand, and streamlined their product offerings through the sale of Bendigo Superannuation.

Financial Stability and Market Outlook

The bank maintains a strong balance sheet position with a customer deposit funding ratio of 77%, while maintaining healthy liquidity metrics. Their Common Equity Tier 1 (CET1) ratio stands at 10.83%, showing a slight decrease from the previous quarter due to dividend payments and regulatory adjustments.

Future Prospects and Strategic Direction

Looking ahead, Bendigo Bank has outlined ambitious plans focusing on simplifying operations, enhancing digital capabilities, and pursuing sustainable growth, with a strategic target to achieve a Return on Equity exceeding 10% by 2030. The bank’s strategy is supported by key enablers, including enhanced risk management capabilities and streamlined technology foundations, overseen by a newly established Strategic Execution Office to ensure effective implementation and accountability. Their focus for the next two years will center on leveraging their deposit franchise through digital onboarding and branch network optimization.