The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price is in focus after the ASX bank share reported its FY26 half-year result.
Bendigo Bank is one of the largest non-big four ASX banks, with its widespread bank network, as well as the digital-only bank Up.
Bendigo Bank FY26 half-year result
Here are some of the main highlights from the report for the six months to 31 December 2025 compared to HY25:
- Residential lending down 0.1% to $65.1 billion
- Customer deposits grew 2.3% to $73.7 billion
- Net interest margin (NIM – the margin on lending to customers) improved 4 basis points (0.04%) to 1.92%
- Cash earnings declined by 3.3% to $256.4 million
- Statutory earnings rose 6.4% to $230.6 million
- Dividend per share flat at $0.30
What happened to drive this result?
Bendigo Bank said that around two thirds of all residential lending settlements were drive by the branch network and its digital mortgage channels. This was offset by a reduction in third-party originated channels, which were impacted by its decision to exit the mortgage partner business.
The ASX bank share said that residential lending applications continued to improve during the second quarter of FY26. The month of December 2025 was at the strongest level this financial year.
Business lending grew 2.8% over the half, though the agribusiness lending reduced by 6.2% with “favourable seasonal conditions and higher crop yields” leading to significant loan paydowns.
Up’s positive momentum continued, with lending growth of 27% to $2.1 billion and deposit growth of 24% to $3.5 billion.
Total operating expenses increased by 4.2% on the prior half because of higher software, amortisation charges and higher remediation expenses. But, the second quarter’s expenses of $307.7 million were 6.4% lower than the first quarter, mostly reflecting lower employee costs and investment spending.
The bank’s board said that it remains committed to investing the capital required to drive its 2030 strategic initiatives while uplifting its AML/CTF risk management capabilities, while integrating the RACQ Bank loan and deposit books.
Bendigo Bank also noted that gross impaired loans decreased 3.1% over the half to $125.6 million. In residential lending, 90-day play arrears increased 3 basis points (0.03%), while the balance decreased for agriculture 90-day plus arrears.
Anti-money laundering and counter-terrorism financing (AML/CTF) update
To address deficiencies in its AML/CTF approach, which is currently under review by AUSTRAC, it’s launching a significant uplift program. This is expected to take up to three years, with an initial estimated cost in the range of between $70 million to $90 million.
The estimated cost for the second half of FY26 is approximately $15 million.
Final thoughts on the Bendigo Bank share price
The ASX bank share said that it has an objective to deliver improved returns to shareholders, targeting a return on equity (ROE) of above 10% by 2030.
Bendigo Bank said that the Australian economy is showing positive signs, with a strong labour market and a recent surge in business investment. But, there is also “lagging productivity”.
The recent RBA rate rise “points to more restrictive policy settings ahead”. But, Australian households are “challenged” with rising cost of living, the home loan customers have shown “financial resilience”.
The ASX bank share’s profit remains solid, but loan growth remains a challenge, with other banks charging ahead such as Macquarie Group Ltd (ASX: MQG) and Commonwealth Bank of Australia (ASX: CBA).
In my view, there are other ASX dividend shares I’d rather invest in with clearer growth potential.
