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Highlights
- Bendigo Bank’s Q3 FY25 profit dips 8%
- Lending growth continues at 9.4% annualised rate
- Rural Bank brand retired in digital transformation
Bendigo and Adelaide Bank Ltd (ASX:BEN) has released its financial performance for the third quarter of FY25, capturing the attention of investors keeping an eye on regional banks within the ASX200 index.
For the quarter ending March 2025, the bank reported a cash earnings figure of $122.2 million, representing a 7.8% decline compared to the average from the first half of the fiscal year. The decline was largely attributed to reduced ‘other income’, including lower completions in its Homesafe product and decreased account keeping fees.
However, the update also revealed some positive momentum. Residential lending grew at an annualised rate of 9.4% from December 2024, reaching $66.7 billion. At the same time, customer deposits increased at a 4.3% annualised rate to $72.7 billion. Savings accounts (excluding offset accounts) saw a notable boost, growing at a 9.3% annualised rate, while transaction accounts experienced a decline.
Net interest income, which reflects the difference between lending revenue and funding costs, was slightly lower than the first-half average. Despite this, the bank managed to keep its net interest margin steady quarter-over-quarter. The bank pointed out that the reduced number of business days in the quarter also impacted earnings.
Operating expenses were down 1.2%, helped by a reduction in staff costs. Credit expenses for the quarter stood at $1.9 million, with lower collective provisions offset by higher specific provisions, particularly within the consumer segment.
On a statutory basis, net profit came in at $109.8 million, a modest 1.3% increase over the first-half quarterly average.
Bendigo Bank continues to streamline its operations, having retired the Rural Bank brand and reduced its number of core banking systems from eight to two. This move forms part of its six-year transformation strategy aimed at improving productivity and digital efficiency.
For investors seeking exposure to ASX dividend stocks, Bendigo Bank’s steady lending growth and cost control may offer appeal, even as short-term profitability faces headwinds.
While the bank’s share price has seen limited movement over the past decade, the consistent dividend stream remains a point of interest for income-focused portfolios. As part of the broader ASX200, Bendigo Bank’s progress in modernising its platform may prove significant in the long term.
