Bendigo bank shares plunge on cost, cash profit miss
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More news: Shares in Bendigo and Adelaide Bank led losses in afternoon trade after its first-quarter cash profit came in lower than expected, with costs also missing estimates.
At 3:04pm AEDT, shares in Bendigo and Adelaide Bank had slipped 7.3% to $11.79.
UBS analyst John Storey said that “the disappointment around the result is mainly cost related offset by a slightly better than expected net interest margin outcome”.
In a research note, UBS analysts flagged that costs came in 6% higher than consensus estimates while cash net profit after tax was a 5.8% miss to consensus.
Bendigo Bank cash earnings slide despite lift in net interest margin
The news: Regional lender Bendigo and Adelaide Bank has seen its cash earnings after tax slide in 1Q FY26 compared to the quarterly average in the second half of FY25 as operating expenses increased due to “seasonal factors and several one offs”.
The numbers: Unaudited cash earnings after tax came in at $120.7 million, which is 3.2% lower than the $124.7 million quarterly average in the second half of FY25. However, it was flat compared to the previous corresponding period.
Unaudited net profit after tax came in at $110 million, recovering from a quarterly average loss of $150.7 million in the second half of FY25.
Net interest margin lifted by 3 basis points to 1.91% from 1.88% in the preceding quarter.
Operating expenses increased by 7.6% to $328.8 million when compared to the quarterly average in the second half of FY25. This included higher staff costs due to additional workdays, leave balance changes and redundancy costs.
The bank was also hit with a $3.7 million unplanned remediation provision.
The context: The bank’s managing director and CEO Richard Fennell said the company delivered “several strategic milestones which will position the bank for sustainable growth in the second half” and beyond.
This included the rollout of the Bendigo Lending Platform across all branch networks except in Victoria and Tasmania, which will have the platform rolled out in November. In-app onboarding process went live at the end of October.
Bendigo and Adelaide Bank has also cut at least 158 jobs, predominantly from its technology division. The bank’s restructure could affect 637 technology workers in total, according to the Financial Sector Union.
The sources: ASX, UBS research
