Bendigo and Adelaide Bank (BEN) H1 2026 earnings summary

Executive summary

• Cash earnings after tax were $256.4 million, up 2.8% sequentially but down 3.3% year-over-year, with statutory profit after tax at $230.6 million, up 6.4% year-over-year, driven by higher net interest income and digital growth.

• Customer base neared 3 million, with NPS +24.9, and digital bank Up achieved its first profitable month ahead of schedule.

• Operating expenses rose 4.2% half-on-half and 6.4% year-over-year, but Q2 expenses were 6.4% lower than Q1 due to productivity gains and FTE reduction.

• The bank self-disclosed AML/CTF risk management shortcomings, with a comprehensive uplift program underway, estimated to cost $70–90 million over three years, and appointed a new Chief Compliance Officer.

• Agreement to acquire RACQ Bank’s loan and deposit books, expected to add 90,000 customers and increase Queensland exposure, subject to regulatory approval.

Financial highlights

• Total income for 1H26 was $1,009.9 million, up 3.7% half-on-half and 3.9% year-over-year; net interest income rose 3.2% half-on-half and 4.4% year-over-year to $871.1 million, with NIM up 4 bps to 1.92%.

• Cash earnings after tax were $256.4 million, with a fully franked interim dividend of 30 cents per share and payout ratio of 66–67%.

• Operating expenses (cash basis) rose 4.2% half-on-half and 6.4% year-over-year to $636.5 million, mainly due to wage inflation, software amortisation, and remediation.

• Net write-back of $2.4 million in credit expenses, with impaired assets at $125.6 million (0.15% of loans); credit portfolio remains resilient.

• Cost to income ratio increased to 63.0%.

Outlook and guidance

• Targeting ROE above 10% by 2030, with a dividend payout ratio of 60–80% of cash earnings and BAU cost growth not exceeding inflation.

• Residential loan growth expected to return to system levels; improved business and agribusiness growth in FY26.

• AML/CTF remediation costs estimated at $70–90 million over three years, with $15 million expected in H2 FY26.

• Credit costs expected at 5–8 bps of loans through the cycle.

• Completion of RACQ Bank acquisition expected in 1H27, subject to regulatory approvals.