Bendigo and Adelaide Bank reported cash earnings of $530.2 million for FY26, representing 3.0% growth on the prior year, with the second half showing stronger momentum at 6.8% growth compared to the first half. The statutory net profit after tax of $375.1 million came in alongside a fully franked final dividend of 33 cents per share, reflecting the board’s confidence in earnings quality and cash generation.
The acceleration between halves reveals improving operational momentum. Second half cash earnings of $273.8 million were driven by 2.6% income growth paired with a 2.1% reduction in expenses compared to H1, demonstrating operating leverage as deposit growth gathers pace. While lending balances grew 3.5% in H2 and deposits expanded 1.1%, the real significance lies in the quality of those deposits. The bank has successfully pivoted toward lower-cost funding, which is expanding net interest margins as it reduces reliance on higher-cost wholesale funding. For shareholders, this combination of improving profitability with returning lending momentum suggests the bank is moving beyond cost-cutting into genuine revenue acceleration.
Bendigo’s strategic investments are beginning to show tangible returns. The digital transformation initiatives have achieved material traction, with almost half of digitally-eligible customers now joining through the Bendigo Bank app and approximately 80% of home loans written through the modernised lending platform. The final stage of core banking system consolidation completed in December 2025, simplifying the technology environment. The Google partnership, which has already deployed Gemini Enterprise across over 5,000 employees, represents a differentiated advantage in embedding artificial intelligence into customer service and risk management.
The productivity program is entering its second phase with restructuring costs of $29 million recorded in FY26. The bank expects total costs of $56 million to $66 million in FY27, with annual run-rate benefits of $65 million to $75 million arriving from FY28 onwards. This staged benefit realisation means margin expansion should accelerate from 2028, creating a multi-year earnings inflection point for investors willing to hold through the near-term investment phase.
The bank has also provisioned $70 million against non-financial risk management deficiencies and announced a multi-year remediation program, a material governance initiative that reflects the regulatory environment facing Australian banks. The acquisition of RACQ Bank’s loan and deposit books remains on track for completion in the first half of 2027, representing a significant expansion opportunity in Queensland with 90,000 customers to migrate.
Investors should monitor the successful execution of the RACQ integration, the realisation of productivity program benefits from 2028, and progress toward the stated return on equity target of above 10% by 2030. The improving deposit mix and lending momentum suggest management is executing its strategy effectively, though the non-financial risk initiatives represent ongoing regulatory execution risk. This announcement is price sensitive and has been flagged as material by the ASX.
View the full ASX announcement (PDF)
About Bendigo and Adelaide Bank Limited (ASX: BEN)
An Australian financial institution formed by the merger of Bendigo Bank and Adelaide Bank in 2007, headquartered in Bendigo. The bank provides retail banking, business banking, and financial services including personal loans, mortgages, investment products, insurance, and superannuation through more than 400 branches. It serves retail customers and small to medium-sized businesses across Australia.
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