Bendigo and Adelaide Bank (BEN) H2 2024 earnings summary

Executive summary

• FY24 results reflect disciplined execution, sustainable value creation, and a resilient balance sheet, with customer deposits at 76% of total loans and customer numbers up 9.1% to over 2.5 million.

• Net Promoter Score of +27.9, well above industry average, reinforcing position as a trusted challenger bank.

• Transformation program and digital investments have established the bank as a credible challenger to major banks, with continued investment in digital and growth engines.

• Maintained historic low credit expenses and strong customer retention, especially through digital channels.

• Community impact highlighted by AUD 40.3 million invested back into communities and AUD 34.4 million in fraud blocked.

Financial highlights

• Statutory NPAT: AUD 545 million, up 9.7% year-on-year; cash earnings: AUD 562 million, down 2.6%.

• Total income increased 1.1% to AUD 1,954.2 million; operating expenses up 5.8% to AUD 1,122.8 million.

• Net interest margin (NIM) stable at 1.94%, up 11bps in H2.

• Final dividend of AUD 0.33 per share, fully franked, up 3.1% on FY23, with a 63.6% payout ratio.

• CET1 capital ratio increased to 11.32%, reflecting strong capital management.

Outlook and guidance

• Expect more stability in net interest margin (NIM) in FY25, with competitive intensity stabilizing and RBA rate cuts expected in early to mid-2025.

• BAU cost growth targeted to remain at or below inflation; investment spend to increase by AUD 30–40 million in FY25 and FY26, mostly OpEx.

• Targeting above-system mortgage growth in FY25, leveraging new lending platform and digital channels.

• Committed to reducing cost-to-income ratio towards 50% and maintaining strong capital position.

• Expect amortization expense to rise as software assets under development become operational.