The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price is under the spotlight after the bank announced its FY25 third quarter update.
Bendigo Bank FY25 third quarter
The regional bank told investors how it performed in the three months to March 2025.
Bendigo Bank said its residential lending grew at an annualised rate of 9.4% (from December 2024) to $66.7 billion.
Customer deposits grew at an annualised rate of 4.3% to $72.7 billion. Transaction accounts declined, while savings accounts (excluding offsets) grew at an annualised rate of 9.3%.
The ASX bank share reported that its net interest income was slightly lower than the FY25 first half quarterly average with the net interest margin (NIM) flat compared to the prior quarter. The NIM is how much profit it makes on its lending, including the cost of funding those loans (such as term deposits). It also noted there were fewer business days in this period, affecting net interest income.
Profitability
Cash earnings came to $122.2 million for the quarter, down 7.8% compared to the FY25 first half quarterly average. That was largely due to lower ‘other income’ because of lower completions in Homesafe and lower account keeping fees.
Operating expenses were below the FY25 first half quarterly average, down 1.2% following reduced staff costs.
Credit expenses were $1.9 million for the quarter, with lower collective provisions partly offset by higher specific provisions in the consumer division. In other words, in dollar terms, Bendigo has seen a negative rise in the cost of particular household loans.
Statutory net profit was $109.8 million, which was 1.3% higher than the FY25 first half quarterly average.
Bendigo Bank said it remains focused on sustainable growth and productivity improvements as it grows the business.
Rural Bank retired
Bendigo Bank also noted that during the quarter it migrated the Rural Bank system and retired the Rural Bank brand, as it delivers the final phase of its six-year transformation program.
The ASX bank share also said it has continued to reduce the number of core banking systems from eight to two, further simplifying its business and technology platforms.
Final thoughts on the Bendigo Bank share price
It’s good to see the business is still growing its lending at a strong rate, which is an important driver for profit growth in future years.
However, investors don’t want to see profit declines either.
The share price is close to where it was a decade ago, so it’s not a business I’m expecting strong capital growth from. However, the dividends are pleasing for shareholders. There are other ASX dividend shares I’d rather focus on first though.
