Bendigo Bank CEO's parting warning: 'Without change the industry is going to be a lot smaller'
The ranks of mid tier banks have plunged 90% during Marnie Baker's 35 years at Bendigo Bank. Without government intervention or regulatory changes, it could get worse.
Australia’s banking sector is being hollowed out with the vital mid-tier layer disappearing under regulatory and broader cost pressures, according to Bendigo and Adelaide Bank CEO Marnie Baker.
“It is concerning that unless there is some sort of change in the way we think about things or some intervention, the banking industry is going to be a lot smaller by number of banks in years to come,” she told Capital Brief on the eve of her retirement after 35 years at Bendigo.
Bendigo yesterday reported a June year cash profit down 2.6% to $562 million, while its net interest margin slipped 4 basis points to 1.90%. Lending rose but so did costs and return on equity was down 44 basis points. However the second half was stronger than the first with cash profit of $293.8 million, up 9.5% from the previous half and at the upper end of market expectations.
Investors though focused on the cost outlook which Baker said would be “no higher than inflation” although targeted investment makes that look a challenge. Costs were the principal reason shares closed down 1.45% in a better market for financials.
