The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price is up 3% after the ASX bank share reported its FY25 result.
Bendigo Bank FY25 result
Here are the highlights from the report for the 12 months to 30 June 2025:
- Residential lending increased 7.6% to $66.6 billion
- Customer deposit increased 6.6% to $72.9 billion
- Cash earnings down 8.4% to $514.6 million
- Statutory earnings sank 118% to $97.1 million loss due to an impairment of goodwill
- Final dividend per share of $0.33, 0% growth
- Annual dividend per share of $0.63, 0% growth
While the bank did report lending growth, it also reported that the net interest margin (NIM) declined – the NIM is lending profitability which takes into account the cost of the funding for the loans such as savings accounts.
Bendigo Bank reported that its NIM fell 2 basis points (0.02%) to 1.88%, while the NIM was flat it in the second half of FY25. It said active management of the consumer product pricing offset the impact of competitive pricing in business and agribusiness lending and a reduced cash rate.
A key part of the cash profit decline was a 7.7% rise of operating expenses. Some of that was because of planned investment spending, though a majority was because of wage and price inflation, technology costs and software amortisation. It noted productivity benefits of $9.4 million during the year, reducing cost growth by 0.8%.
Credit quality
The bank noted that gross impaired loans decreased 4.5% to $129.5 million.
In residential lending, the 90-day plus arrears increased by 19 basis points towards pre-COVID levels. In agribusiness, 90-day plus arrears increased due to delays in completing annual reviews, partly due to complexities arising from the Rural Bank customer migration.
Outlook for the Bendigo Bank share price
Bendigo Bank noted that Australia’s economy is well-positioned, with moderating inflation allowing for further RBA rate cuts, while US tariffs may impact the Australian economy to a lesser extent than other economics.
The more neutral RBA cash rate level should “combine favourably with resilient labour markets and low unemployment.”
The bank will aim to work further towards making things digital, operating simply and efficiently and more. It wants to ensure its initiatives consistently improve financial metrics and deliver increased shareholder value. It’s targeting a return on equity (ROE) of more than 10% by 2030.
I’m not sure if this is the right time to invest considering the Bendigo share price has recovered in the last few months. There could be a better time to invest in the future, though it’s offering a decent dividend yield today.
