How Will Bendigo Bank’s Bold 2030 Strategy Shape Its Future After FY25 Loss?

Mixed Financial Performance Amid Strategic Reset

Bendigo and Adelaide Bank (ASX – BEN) has released its financial results for the year ended 30 June 2025, revealing a complex picture of resilience and challenge. While cash earnings declined by 8.4% to $514.6 million, the bank reported a statutory net loss after tax of $97.1 million, largely attributable to a significant goodwill impairment recognised in the period.

Despite these headwinds, the bank’s board declared a fully franked final dividend of 33 cents per share, unchanged from the prior year, signalling confidence in the underlying business and its capital position.

Customer Growth and Digital Momentum

One of the standout positives was the continued expansion of Bendigo’s customer base, which grew 11% to 2.9 million. This growth was driven in large part by the digital bank Up, which saw its customer numbers surge 29% to 1.2 million, now representing over 40% of the total Bendigo customer base. Up’s exceptional Net Promoter Score of +55.2 underscores its strong customer appeal and positions it as a key growth engine for the bank.

The bank also reported a 6.3% increase in total lending, with residential lending up 7.6%, supported by the Bendigo Lending Platform’s rollout to brokers and mobile relationship managers. Customer deposits rose 6.6%, reflecting the strength of the bank’s brand and deposit franchise, with a notable shift towards lower-cost deposits improving funding efficiency.

Cost Management and Operational Simplification

Operating expenses increased by 7.7%, driven by planned investment spend and inflationary pressures, including wage and technology costs. However, the bank highlighted disciplined management of business-as-usual expenses, which grew well below inflation in the second half. Productivity initiatives delivered $9.4 million in benefits, contributing to a modest reduction in cost growth.

Significant progress was made in simplifying the bank’s technology infrastructure, including reducing core banking systems from three to two and retiring the Rural Bank brand. These moves aim to streamline operations and support the bank’s long-term efficiency goals.

A Vision for 2030 – Growth, Trust, and Sustainability

Looking ahead, Bendigo and Adelaide Bank unveiled a comprehensive 2030 Strategic Plan anchored by five pillars – enhancing digital ease, operational simplicity, deepening customer relationships, setting trust and societal impact benchmarks, and reinventing banking for a new generation through Up.

The strategy is underpinned by commitments to climate action aligned with a 1.5°C pathway, balancing decarbonisation with sustainable business growth. The bank aims to leverage its strong deposit franchise, drive productivity improvements, and fund lending growth primarily through lower-cost deposits. A target Return on Equity above 10% by 2030 reflects the ambition to deliver improved shareholder returns.

Outlook and Market Positioning

With a robust balance sheet, including strong capital and liquidity, and a net credit write-back of $14.7 million reflecting high-quality loan portfolios, Bendigo Bank is positioning itself to navigate a cautiously optimistic economic environment. The Reserve Bank of Australia’s easing inflation and potential rate cuts provide a supportive backdrop, though global uncertainties remain.

New executive appointments and the establishment of a Strategic Execution Office signal a disciplined approach to delivering on the 2030 vision. Investors will be watching closely to see how these initiatives translate into consistent financial improvements and competitive positioning in the evolving banking landscape.