Bendigo and Adelaide Bank’s Struggles with Anti-Money Laundering and Counter-Terrorism Financing Risks
Yesterday, the Bendigo and Adelaide Bank made headlines by revealing its ongoing struggles with the identification, mitigation, and management of money laundering and terrorism financing (ML/TF) risks. This disclosure, which surprised many in the market, pointed to concerning deficiencies in the bank’s approach to these risks.
In August 2025, the bank contracted Deloitte, a renowned global professional services network, to carry out an independent investigation at one of its branches. This investigation was prompted by suspicious activity that suggested money laundering. The bank had previously spotted and reported this activity to the Australian Transaction Reports and Analysis Centre (AUSTRAC) and law enforcement agencies.
The Independent Investigation
The investigation by Deloitte focused on the activities at the branch between August 1, 2019, and August 1, 2025. The bank ensured that the scope of the review was wide enough to pinpoint both the nature and extent of the issues at the branch, as well as any systemic issues related to Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF).
Deloitte’s review concluded that there were broader deficiencies in the bank’s approach to ML/TF risks during the period under review. They found that these deficiencies were not limited to the branch under investigation but extended to many key aspects of the bank’s ML/TF risk management.
The Bank’s Response to the Findings
In its 2025 annual report, Bendigo highlighted that 98% of its staff completed mandatory annual AML/CTF training. The bank also conducted an initial impact assessment in light of amendments to relevant laws that were set to take effect the following year. The assessment revealed short and medium-term opportunities that would be addressed primarily through an AML Uplift Program, which the bank has allocated funding for.
However, despite these efforts, Deloitte’s findings show that there were still significant gaps in the bank’s approach to managing ML/TF risks. Specifically, transaction monitoring was found to be inadequate, with many ML/TF risk indicators not adequately covered.
In response to these findings, the Bendigo board has pledged to fully fund the uplift program to rectify all deficiencies identified by Deloitte. However, the final costs of this initiative are currently unknown.
Market Reaction to the Disclosure
It is puzzling that there was no mention of this matter in the bank’s annual report or any disclosure prior to yesterday, given that Bendigo engaged Deloitte in August. The market reacted negatively to the bank’s disclosure, with Bendigo’s share price dropping 80 cents or 7% to $10.20.
This latest news is not the first of its kind for Bendigo, as investors have grown accustomed to disappointing news from the bank. Over the last two years, the bank’s shares have experienced a series of heavy sell-offs following disappointing results and trading updates.
In conclusion, Bendigo and Adelaide Bank are currently grappling with significant anti-money laundering and counter-terrorism financing risks. The bank is making efforts to address these issues, but it remains to be seen how effective these measures will be in improving the bank’s ML/TF risk management.
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