Bendigo and Adelaide Bank: A Cautious Approach to Mortgage Broker Operations
The Australian financial sector witnessed a significant development recently, as Bendigo and Adelaide Bank, one of the country’s leading banking institutions, reported a quarter-on-quarter decline in its mortgage balances for the September 2025 quarter. This marked a 5.6% annualised decrease, signalling the bank’s cautious approach to the competitive dynamics in third-party channels, primarily mortgage brokers.
Financial Performance: An Overview
The bank’s cash earnings for the quarter amounted to $121 million, remaining flat when compared with the same period in the previous year. This stagnation is attributed to an increase in income offset by a rise in expenses. The bank’s statutory net profit stood at $110 million, with net interest income showing an upward trend due to a higher net interest margin.
Deposit Mix: A Positive Shift
Interestingly, the bank reported an improvement in the deposit mix over the quarter. The lower-cost deposits witnessed a growth of 3.4% annualised, now accounting for 53.0% of customer deposits. On the other hand, term deposits decreased, making up 34.7% of customer deposits.
Balance Sheet and Future Growth
Despite the decline in mortgage balances, Bendigo and Adelaide Bank maintains an optimistic outlook for the future. The bank suggests that its balance sheet remains well-positioned for a return to growth in the second half of the financial year. This is a reassuring statement for stakeholders and customers alike, indicating the bank’s solid financial footing and strategic planning.
Incidental Remediation Provision
The bank also disclosed that an unplanned additional remediation provision of $3.7 million was incurred over the quarter. While the specific details of this provision were not revealed, it is an important factor to consider in understanding the bank’s overall financial performance.
Market Reactions
The market’s response to the bank’s trading update was somewhat adverse, with Bendigo and Adelaide Bank’s shares dropping by $1.08 or 8.5 per cent to $11.64. This reaction indicates the sensitivity of the market to the bank’s strategic decisions, particularly in relation to its mortgage broker operations.
As the financial sector continues to evolve, Bendigo and Adelaide Bank’s approach to managing its mortgage broker operations will be closely watched. Its cautious strategy, focused on maintaining a strong balance sheet and steady growth, highlights the bank’s commitment to financial stability and customer trust.
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