Moody’s Ratings Boosts Bendigo and Adelaide’s Long-term Rating
In an exciting development for Australia’s banking sector, Moody’s Investors Service has upgraded the long-term rating of Bendigo and Adelaide Bank. The leading provider of credit ratings, research, and risk analysis has elevated the bank’s score from Baa1 to A3, demonstrating increased confidence in the institution’s financial stability and potential for continued growth.
Reinforcement of Short-term Ratings
Along with the long-term rating upgrade, Moody’s Ratings has also affirmed all short-term ratings at P-2. This move signifies the financial institution’s consistent performance and ability to meet its short-term financial commitments. The rating outlooks have shifted from positive to stable, indicating expectations that the bank’s performance will remain solid.
Factors Driving the Upgrade
Moody’s Ratings’ decision to upgrade Bendigo and Adelaide Bank’s long-term rating was influenced by several key factors. One of the most significant is the bank’s very strong asset quality. As per the rating agency, the bank’s asset quality is robust, evidenced by its low levels of non-performing loans, which stood at 1.2% as at June 2025.
The bank’s asset quality profile is further strengthened by its low-risk residential mortgage lending portfolio. Moody’s Ratings highlighted the “relatively high quality” of the bank’s residential mortgage exposures, the good geographical distribution of these loans, and the very low exposure to borrowers with high debt-to-income ratios.
Stable Funding Profile and High-Quality Deposit Book
Another factor contributing to the upgrade is the bank’s very strong funding profile. Bendigo’s funding profile is a key strength, underpinned by high levels of stable customer deposits. As at 30 June 2025, customer deposits constituted 77% of the bank’s funding sources.
Moody’s Ratings also emphasised the quality of Bendigo’s deposit book. The bank’s community banking model, which provides access to highly stable deposits, reinforces the deposit book’s quality. Among the large Australian banks, Bendigo has the highest proportion of stable deposits in its weighted available stable funding, standing at 49%, significantly above the average of the major banks.
What This Means for the Bank
The long-term rating upgrade by Moody’s Ratings is a vote of confidence in Bendigo and Adelaide Bank. It signifies the bank’s robust financial health, strong asset quality, and resilient funding profile. The fact that the rating outlook has been changed to stable from positive further reflects the market’s confidence in the bank’s capacity to maintain its strong performance.
Given the bank’s commitment to its community banking model, and its dedication to maintaining high levels of stable customer deposits, it is well-positioned for future growth. With its low-risk lending portfolio and a low ratio of non-performing loans, Bendigo and Adelaide Bank stands as a strong and reliable player in Australia’s banking sector.
For more information on the rating upgrade, you can access the original article Here.
