Bendigo & Adelaide Bank Ltd. · ASX:BEN
Bendigo & Adelaide Bank — H1 FY2025 Earnings Presentation
64 slides from Bendigo & Adelaide Bank's earnings presentation, Feb 17, 2025
Slide 1: Results Presentation
Results Presentation For the half year ended 31 December 2024 Released 17 February 2025 Bendigo and Adelaide Bank Limited ABN 11 068 049 178
Slide 2: Acknowledgement of Country
Acknowledgement of Country I would like to begin today by acknowledging the Traditional Custodians of the many lands that we are gathered on. Specifically, I would like to respectfully acknowledge the Wurundjeri people of the Kulin Nation. I would also like to acknowledge the Traditional Custodians
Slide 3: Overview, 1H25 Results, Summary, Investor Summary pack
01 02 Overview 1H25 Results Richard Fennell, Chief Executive Officer Andrew Morgan, Chief Financial Officer and Managing Director Page 16 Page 4 03 04 Summary Investor Summary pack Richard Fennell, Chief Executive Officer and Managing Director Page 32 Page 30 3
Slide 4: Overview: Key messages
Overview Key messages • Customer numbers up 4.9% over the half, to over 2.7 million customers, NPS +31.1 above industry1 • Mortgage growth above system supported by the roll out of the Bendigo Lending Platform and Up Home • Deposit to loan ratio 73%, deposit growth 10.8% (annualised) • Over $100 bil
Slide 5: 1H25 Results
1H25 Results Cash earnings impacted by deposit mix, continued investment and inflationary cost pressures -1.1% pcp Cash Earnings ($m) -9.7% HoH 268 265 294 265 1H24 1H25 2H24 1H25 Cash earnings callouts • 1H25 cash earnings after tax down 9.7% on 2H24, and largely in line with pcp • Total income dow
Slide 6: 1H25 Divisional results
1H25 Divisional results Strong residential lending and Up deposit growth over the half Consumer Cash Earnings ($m) Business & Agribusiness • 3.7% decrease in cash earnings • 5.0% decrease in cash earnings • 1.0% increase in Net Interest Income • Decrease in Net Interest Income 4.5% • 8.8% increase i
Slide 7: Shaping the future of banking – our strategy
Shaping the future of banking – our strategy For our customers, our people, partners, communities and shareholders To feed into prosperity, not off it 7
Slide 8: Unwavering commitment to our customers
Unwavering commitment to our customers Our proactive approach Commitment to accessible Economic outlook and impact banking Regional focus Protecting our customers Cost of living pressures remain • More branches per customer than • The only regionally headquartered • Blocked $34.4 million (FY24) in f
Slide 9: Transforming our business
Transforming our business Continuing focus delivering results 1. Returns 2. Execution 3. Business Sustainability 9
Slide 10: Returns
Returns Cash earnings ($m) Stable DPS, CET1 remains strong 268.2 293.8 265.2 • Cash earnings lower due to lower income and 1H24 2H24 1H25 increased investment spend Dividends per share (cents) • Dividend per share is in line with prior 33.0 comparative period 30.0 30.0 1H24 2H24 1H25 • Strong CET1 c
Slide 11: Returns: Building growth across both sides of the balance sheet
Returns Building growth across both sides of the balance sheet Consumer segment – Residential lending growth (HoH) • Largest Residential Lending growth in 6 halves • Largest Deposit growth in 7 halves • Growth supported by investment in digital 5.9% experiences and digital automation 2.8% • For Lend
Slide 12: Execution: Growth Engines
Execution Growth Engines Business and Agribusiness Bendigo Lending Platform • Launched the new CRM and lending • Bendigo Lending Platform (BLP) rolled out to platform to Business banking over 11,000 brokers in 2024 • Business Direct team established in • $2.8bn settled in Bendigo Broker in 1H25 Nove
Slide 13: Up – delivering growth and margin
Execution Up – delivering growth and margin Up - # of customers by age Dec 2021 v Dec 2024 Customer <$50 Cost of Acquisition1 >1 million Upsiders2 60,000 18 – 35yo 13% Customer Growth (HoH) 58.4 NPS3 50,000 Home lending stage Up balances 40,000 $2.6b in Deposits, up 23% (HoH) $1.2b in Home Loans up
Slide 14: Business Sustainability: Digital Channels
Business Sustainability Digital Channels % of residential lending settlements from digital1 Digital deposits2 ($m) 19.3% Bendigo Bank Up $2,575.1 Originated through multiple channels 19.1% Direct: 16.3% Digital Deposit Growth HoH YoY Bendigo Bank 33% 70% $2,100.8 $2,052.6 Up 23% 45% Total 27% 55% Th
Slide 15: Sustainability in our business
Sustainability in our business Driving action towards a resilient and sustainable future since FY19 People Customers Communities Environment Belonging at BEN Financial Inclusion Action Plan Community Bank model Climate Strategy • Gender Equity 7 out of 9 • Specialised team • $366 million returned to
Slide 16: 1H25 results
1H25 results Andrew Morgan – Chief Financial Officer 16
Slide 17: Financial and operating performance
Financial and operating performance Funding costs and mix impacting income 1H25 ($m) 1H25 v 2H24 1H25 v 1H24 Key points – half year Total income 972.4 (2.5%) 1.6% • Income impacted by lower net interest margin and lower Homesafe income Operating expenses 598.4 5.0% 8.3% • Operating expenses reflect
Slide 18: Cash earnings vs Statutory NPAT
Cash earnings vs Statutory NPAT Result impacted by reduced property valuations; restructure costs coming down 1H25 ($m) 2H24 ($m) 1H24 ($m) Key items Cash earnings after tax 265.2 293.8 268.2 • Homesafe reduction mostly reflects impact of lower house Non-cash items: prices on carrying value • Sale o
Slide 19: Overview of key 1H25 financials
Overview of key 1H25 financials Balance sheet momentum continues from 2H24 Balance sheet 1H25 P&L 1H25 Total lending1 $83.6b 3.4% Net Interest Income $834.7b (2.1%) Operating expenses Residential lending1 $65.2b 5.3% $543.3b 4.1% (ex investment spend) Customer deposits $72.0b 5.4% Cash earnings $265
Slide 20: Total income
Total income Lower income mostly impacted by lower net interest margin Income 1H25 v 2H24 AIEA1: +0.6% NIM: (6bps) 997.4 17.9 2.2 4.9 972.4 2H24 Net Interest Income Other Income ex Homesafe Homesafe2 1H25 Income callouts: Key considerations: • Lower NII driven by NIM contraction partly offset by gro
Slide 21: Net interest margin
Net interest margin Result reflects higher cost of funding and adverse mix NIM 1H25 v 2H24 1.96% 0.02% 1.94% Deposit +4bps Capital +2bps 0.06% 0.04% 0.01% 1.88% 0.06% 0.03% Residential lending1 (3bps) B&A lending (2bps) Wholesale funding mix (3bps) Offset accounts (1bps) Savings (2bps) TD’s (1bps) 2
Slide 22: Residential lending
Residential lending New business by LVR (%) Diversified channels delivering growth and improving returns 10.8% 9.6% 9.2% • Total portfolio up 5.3% on prior half (2.0x system) 53.8% 56.0% 50.4% • Average LVR trending downwards over last 18 months; c.40% 35.4% 34.4% 40.4% of new originations below 60%
Slide 23: Strength of deposit franchise
Strength of deposit franchise Branch network provides stable funding source APRA household deposit/loan ratio1 • Growth of 5.4% on prior half, the largest in 7 halves • Proprietary and Community Bank branch networks remain a critical and stable source of deposit funding – up 5.5% • Digital deposit m
Slide 24: Operating expenses
Operating expenses Cost growth driven by wage and price inflation, and increased software amortisation Contribution +5.5% +1.2% (1.8%) (1.1%) +1.2% to movement +3.8% 6.6 10.0 598.4 -13.1 6.2 591.7 6.7 20.6 8.5 31.2 • Lower FTE in Operations 570.1 • Other non-FTE cost reduction activities • Wage and
Slide 25: Credit Quality
Credit Quality Credit metrics remain sound Credit expense ($m)1 Gross impaired loans ($m)2 10.8 % gross loans 0.17 0.15 11.1 1.1 112.7 (0.3) (2.0) 16.6 (0.9) (9.9) 135.7 127.4 (0.6) 96.1 (10.5) 1H24 2H24 1H25 Dec-23 Jun-24 Dec-24 Collective Specific Reported Impaired Restated Impaired BEN provision
Slide 26: Funding and liquidity
Funding and liquidity Stable and diversified funding sources Funding profile ($b) 4.0 2.9 22.1 20.4 20.0 21.3 • Customer deposits as a percentage of total funding continues to increase 24.4 26.0 25.4 26.2 76.5% Customer • Net +$14b of funding from Community Bank deposits 45.8 network provides relati
Slide 27: Capital and dividends
Capital and dividends Capital position remains strong CET1 movement - 6 months (%) 0.49 (29bps) (15bps) 0.58 0.12 0.01 0.25 0.14 Resi Mtges (26bps) 11.32 Op Risk (5bps) 11.17 Other CRWA +6bps 11.03 1 2 Jun-24 Earnings Dividends Capitalised Other RWA CET1 pre Divestments3 Dec-24 expenses divestments
Slide 28: Pathway to achieving ROE above the cost of capital
Pathway to achieving ROE above the cost of capital 1H25 proof point BAU expenses tracking at Continued focus on productivity and scale 2.1% CAGR over five years Digital Investing in our deposit gathering franchise underpinned by deposits the strength of our Community Bank model +20% on prior half B&
Slide 29: Q&A
Q&A Richard Fennell Chief Executive Officer and Managing Director Andrew Morgan Chief Financial Officer 29
Slide 30: Summary
Summary Richard Fennell – Chief Executive Officer and Managing Director 30
Slide 31: FY25 - priorities
FY25 - priorities Delivering on customer expectations to meet shareholder returns Customer experience Growth Engines Delivering on fundamentals • 429 branches, with more • Begin the roll out of • Rural Bank migration than half in regional Bendigo Lending platform complete by FY25 locations to retail
Slide 32: Investor Summary pack
Investor Summary pack 32
Slide 33: Who we are
Who we are Overview • 166 years of history, amalgamation of more than 80 different organisations 2.70 • 2.23% market share +7,000 • 429 total branches (308 Community Bank and private million employees franchise, 121 company owned)2 customers • Multi-channelled: • Residential lending – Retail, Digita
Slide 34: Consumer
Consumer Multi-channel strategy drives growth Volume growth ($m)1 Divisional NIM (%) Jun-24 Dec-24 • Net interest income increased 1.0% reflecting growth in assets (5.4% for the half), partly offset by 7bps margin contraction • Customer deposit balances increased $3.1b (7.1% 61.6 65.0 1.84 1.77 for
Slide 35: Business and Agribusiness
Business and Agribusiness Significant opportunities over the medium term Volume growth ($m)1 Divisional NIM (%) Jun-24 Dec-24 • Net interest income decreased 4.5% as seasonal outflows in Agribusiness reduced asset balances while margins contracted 33bps for the half due to lending and deposit mix 20
Slide 36: Homesafe
Homesafe Summary of performance Homesafe portfolio & funding balance ($m) • Restructure of Homesafe investments in December 2023: 1 1,099.6 Dec-24 split: • Ceasing funding of new contracts from 30 June 2024 Melbourne – 57% Sydney – 43% • Portfolio valued at c.$1.1b will be in run-off as existing con
Slide 37: Residential lending
Residential lending Residential metrics1 Flow Portfolio 1H25 2H24 Dec24 Jun-24 Dec-23 Flow / Portfolio amount $10.1b $7.8b $65.2b $61.9b $60.1b 2 Retail lending (Proprietary) 30% 31% 43% 44% 46% 3 Third Party Banking lending (Broker/white label) 51% 50% 47% 45% 47% 4 Digital Lending 19% 19% 10% 10%
Slide 38: Residential lending portfolio
Loans to Households1 BEN market share Residential lending portfolio +2.76% Fixed rate maturities and growth versus system 2.74% Residential lending portfolio fixed rate maturities ($b) 2.71% 2.67% 2.65% 3.4 3.0 Jun-23 Dec-23 Jun-24 Dec-24 2.7 Loans to Households1 vs System (HoH annualised) 10.7% 6.1
Slide 39: Residential lending: Portfolio and state splits
Residential lending Portfolio and state splits Residential balance by state2 Residential portfolio ($b)1 65.2 61.9 60.3 60.1 15% 59.8 59.7 10% 9% 26% 38% Jun-22 Dec-22 Jun-23 Dec-23 Jun-24 Dec-24 2% 1. Residential portfolio balances are represented by product and include all portfolios including rel
Slide 40: Business lending
Business lending Portfolio and state splits 1 Business balance by state3,4 Business portfolio ($b) 9.7 9.3 9.4 9.4 9.5 9.4 14% Jun-22 Dec-22 Jun-23 Dec-23 Jun-24 Dec-24 5% 7% 2 SME segment ($b) 5.3 5.3 14% 5.2 5.1 5.1 5.0 58% Jun-22 Dec-22 Jun-23 Dec-23 Jun-24 Dec-24 2% 1. Business portfolio balance
Slide 41: Agribusiness lending
Agribusiness lending Portfolio and state splits Agribusiness balance by state3 Agri exposure by industry1 5% 7% Grain/Sheep/Beef Sheep/Beef 6% 30% Beef 8% Grain Sheep Dairy 16% 15% Other 10% Hort./Vit. 13% 16% 17% Agribusiness portfolio ($b)2 21% 7.1 6.7 6.6 6.3 6.3 6.0 33% Jun-22 Dec-22 Jun-23 Dec-
Slide 42: Loans by Purpose v Loans by Product
Loans by Purpose v Loans by Product Business Lending ($b) Residential Lending ($b) (0.9%) +5.3% (0.6%) +5.5% 10.6 9.7 10.2 10.3 10.3 10.4 9.5 10.3 9.3 9.4 9.4 9.4 Jun-22 Dec-22 Jun-23 Dec-23 Jun-24 Dec-24 Business purpose Business product 63.7 65.2 58.6 60.3 58.5 60.1 60.4 61.9 Agribusiness Lending
Slide 43: Financial assets - credit risk exposures
Financial assets - credit risk exposures Dec-24 ($b) Jun-24 ($b) Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total Residential/Consumer 59.60 5.25 0.59 65.45 56.43 5.24 0.46 62.13 Accommodation and food services 0.16 0.02 0.00 0.18 0.16 0.03 0.00 0.20 Administrative and support services 0.
Slide 44: Replicating portfolio impact on NIM
Replicating portfolio impact on NIM Capital and deposit hedges • Minor NIM benefit expected over medium term from impact of Average hedged yield on capital and deposit replicating portfolio2 stabilised interest rates on capital and deposit replicating yields • Actual outcomes will be determined by a
Slide 45: Community Bank: How the revenue share works
Community Bank How the revenue share works Community 50/50 Bank footings Interest rate FTP rate1 Margin income split between BEN and Community Banks Community Bank revenue: Community Bank Community Operating Operating 50% costs Bank profit costs Margin income share plus a Distributions to Community
Slide 46: Community Bank: 'Profit with purpose' model
Community Bank ‘Profit with purpose’ model 2 Community Bank footings ($b) Aims: Community Bank branches are a significant source of deposits for the broader Group, To secure branch banking services for participating communities increasing $2.2b in 1H25 To empower and build confidence and capacit
Slide 47: Community Bank impact
Community Bank impact Driving positive social and economic outcomes in communities across Australia 981,023 1,773 70,000+ 1,554 216 308 Community Bank Community Bank Community Bank Community Bank Community Bank Community Bank and Customers Staff Shareholders Directors Companies private franchise bra
Slide 48: Business Sustainability: ESG metrics
Business Sustainability ESG metrics Sustainability commitments Status 1H25 outcomes FY25 priorities Environment & Climate No direct lending exposure to coal, coal seam gas, crude oil, natural gas, native Maintained Policy in place forest logging projects Maintain carbon neutral status Maintained In
Slide 49: Transformation scorecard
Disciplined year-on-year execution of strategy Transformation scorecard FY19 1H23 1H24 1H25 # brands1 13 10 7 4 # core banking systems 8 7 4 3 # IT applications 650 467 348 323 % applications in the Cloud2 1% 29% 42% 57% % of API re-use 0% 30% 48% 67% Median time to decision (home loans)3 22 days 11
Slide 50: Investment spend
Investment spend Continuing to invest for scale and simplification benefits Investment spend ($m)2 % Opex3 Top investment spend for 1H25: 44% 43% 44% 49% • Digital Lending Platform (Foundational Technology) 109.6 111.8 • Up Digital Bank (Growth and Productivity) 106.5 104.6 2.7 9.3 • One Digital Pla
Slide 51: Arrears
Arrears Remain benign though increasing in consumer lending Residential loan arrears Business loan arrears 1.0% 5.0% 0.8% 0.69% 4.0% 0.63% 2.79% 2.52% 2.64% 0.53% 0.52% 0.54% 0.6% 0.46% 3.0% 2.26% 0.41% 2.07% 2.10% 2.06% 0.49% 0.4% 2.0% 1.76% 0.2% 1.0% 0.0% 0.0% Jun-21 Dec-21 Jun-22 Dec-22 Jun-23 De
Slide 52: Credit quality
Credit quality Residential loan portfolio remains resilient % of exposures by payments in advance (including offsets)2 35 Current LVR of no buffer and Composition of no buffer and <1 month ahead (% of EAD) 30 <1 month ahead (% EAD) 25 35 20 31.4 31.3 30.2 15 23 35% 34% 8 10 15.6 15.2 14.5 14.3 14.2
Slide 53: Specific provisions and impaired assets
Specific provisions and impaired assets Impaired balances improved through the half Specific provision balance ($m) Specific provisions breakdown ($m) 20.0 19.4 20.0 20.1 Represented by 14.0 10.0 41.3 10.4 10.1 39.6 36.8 6.4 2.0 1.3 1.5 1.5 1.5 4.3 4.3 0.8 - Dec-23 Jun-24 Dec-24 Dec-23 Jun-24 Dec-24
Slide 54: Provisioning
Provisioning Provisioning remains appropriate for the current operating environment Total provisions ($m) Collective provisions ($m) as % of gross loans 381.5 384.9 381.2 374.0 368.5 0.32 0.30 0.28 95.2 95.2 95.2 95.2 95.2 248.3 246.4 236.5 43.7 38.5 37.6 41.3 39.6 47.8 46.5 36.8 204.7 207.9 198.9 2
Slide 55: Collective provisions and scenario outcomes
Collective provisions and scenario outcomes Continued caution is warranted Total collective provision movements ($m) 4.2 4.1 248.3 9.1 246.4 14.1 7.1 5.7 238.5 236.5 Jun-23 Changes resulting Changes to Dec-23 Changes resulting Changes to Jun-24 Changes resulting Changes to Dec-24 from modelled overl
Slide 56: Collective provisions and scenario outcomes: Model inputs
Collective provisions and scenario outcomes Model inputs Unemployment (%) Gross Domestic Product (%) 11% 8% 10% 6% 9% 8% 4% 7% 2% 6% 5% 0% 4% -2% 3% 2% -4% Dec-24 Jun-25 Dec-25 Jun-26 Dec-26 Jun-27 Dec-27 Dec-24 Jun-25 Dec-25 Jun-26 Dec-26 Jun-27 Dec-27 Significant improvement Mild improvement Base
Slide 57: LCR and NSFR
LCR and NSFR Funding & liquidity ratios remain well positioned Liquidity Coverage Ratio ($b) 1 LCR half year (%)1 135.2% 6.6 11.0 5.8 2.0 High quality liquid assets 1.2 13.0 1.9 137.8 Other cashflows 135.2 Wholesale funding 5.8 Customer deposits Liquid assets Net cash outflows Jun-24 Qtr High qualit
Slide 58: Customer deposits
Customer deposits Deposit split and funding costs Customer deposits - by type Customer deposit – funding costs $72.0b $8.8b 0.2% Term Deposits 1.0% 15.8% 74.9% 7.9% <= 1.00% > 1.00% - <= 2.00% $26.2b 0.3% > 2.00% - <= 3.00% > 3.00% - <= 4.00% > 4.00% - <= 5.00% 5.7% 0.0% > 5.0% Savings 15.1% 18.7% 4
Slide 59: Capital
Capital Strong CET1 capital position provides flexibility CET1 ratio – using standardised RWA1 S&P RAC Ratio2 11.17% 14.40% 13.50% 13.20% BEN CET1 ~ 22% higher than major bank average 9.29% 9.27% 12.30% 9.09% 11.30% 8.84% BEN Major 1 Major 2 Major 3 Major 4 BEN Major 1 Major 2 Major 3 Major 4 CET1 r
Slide 60: Dividend
Dividend Consistent returns for shareholders Dividends (cents per share) • 1H25 dividend in line with 1H24 Payout ratio1 • Dividend levels managed across the year 56% 64% 63% 64% 64% 33 • Target payout ratio 60-80% of cash 32 earnings 30 30 29 • Strong CET1 capital position provides flexibility • In
Slide 61: Bendigo Bank Executive
Bendigo Bank Executive Richard Fennell Sarah Bateson Taso Corolis Andrew Morgan Kerrie Noonan Chief Executive Officer Chief Marketing Officer Chief Customer Officer - Chief Financial Officer Chief Risk Officer and Managing Director Consumer (Starting 20 February 2025) Kieran O’Meara Adam Rowse Xavie
Slide 62: Abbreviations
Abbreviations 1H24 – First half of financial year 2024 bps – basis points NIM – Net Interest Margin 1H25 – First half of financial year 2025 CAGR – Compound annual growth rate NPAT – Net Profit After Tax 2H24 – Second half of financial year 2024 CET1 – Common Equity Tier 1 NPS – Net Promoter Score 2
Slide 63: Important Information
Important Information This document is a presentation of general background information about the Group’s activities current at the date of the presentation. It is information in a summary form and intended to be read by a professional analyst audience and no representation or warranty is made as to
Slide 64: Shareholder Centre
Shareholder Centre BEN Financial Annual Corporate Investor Sustainability Results & Financial Report Governance Calendar Report Presentations Statement www.bendigoadelaide.com.au www.bendigoadelaide.com.au www.bendigoadelaide.com.au www.bendigoadelaide.com.au www.bendigoadelaide.com.au /results /afr
Bendigo & Adelaide Bank — H1 FY2025 Earnings Presentation on 6ix