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The non-major saw strong growth in its residential loan book in 1H25, achieving its biggest increase in six halves.
Non-major banking group Bendigo and Adelaide Bank has released its financial results for the half year ending December 2024 (1H25), revealing that the third-party channel has delivered strong loan book growth for the group.
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According to the group’s results, the banking group’s residential mortgage flows increased to $10.1 billion over the half, up from $7.8 billion on the prior half and up from $6.5 billion in 1H24. This took the residential loan book to $65.2 billion at the end of December 2024, up 5.3 per cent on 2H24.
The residential lending growth was the largest recorded for three years (or six consecutive halves) at 5.9 per cent.
The proportion of business coming from the broker channel has continued to increase, with the third-party channel (comprising both brokers and white label partners and mortgage partners) accounting for 51 per cent of new mortgage business.
This was up on 50 per cent of new business in the previous half, but down from the 52 per cent recorded in 1H24 (before the group retired the Adelaide Bank brand and made Bendigo Bank solely available to the broker channel.)
However, the group has been investing heavily in the mortgage offering from Bendigo in the past year, including by rolling out a new lending platform. According to the bank, more than $2.8 billion of loans were settled by brokers through the lending platform in 1H25.
It is reportedly now driving more than a quarter of all residential settlements and is 1.4 times more efficient in lending.
Bendigo also hailed consistent growth through the broker channel for its business and agribusiness segment.
For the third half-year reporting period in a row, broker-originated lending increased by more than 20 per cent for the business and agri arm.
Branches, including community banks, accounted for 30 per cent of new residential lending settlements. The bank’s digital loan offerings (such as BEN Express, Tiimely [formerly Tic:Toc], Up, NRMA, and Qantas) accounted for 19 per cent of all new settled mortgages in the half.
Profits shrink on higher costs
The bank reported a first-half net profit after tax of $216.8 million, down 17.5 per cent on the prior six-month period and plunging 23.2 per cent lower year over year.
Cash earnings for the half were $265.2 million, down 1.1 per cent on a year earlier and down 9.7 per cent on the previous half.
The lender’s net interest margin was down 6 bps over the half (from 1.94 per cent on a normalised basis) to 1.88 per cent, impacted by higher cost deposits and increased wholesale funding costs.
Deposit mix was impacted by customers preferring to hold higher balances in their offset accounts and longer-dated term deposits.
Commenting on results, CEO and managing director Richard Fennell said: “We have experienced significantly increased demand for both lending and deposit products from our customers, which has led to the strongest balance sheet growth we have experienced in some years.
“However, our earnings have been challenged both on the income and expense lines. Income was impacted by margin pressures, driven by higher funding costs to support accelerated lending growth. Expenses have also increased due to continued investment to deliver our transformation program.”
Fennell said that the successful rollout of the Bendigo Lending Platform had helped support home lending growth at twice the rate of the system over the half. The platform will be rolled out to mobile lenders and branches this calendar year, he said.
[Related: Broker feedback shows early success of Bendigo Bank Broker]
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