The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price fell 9% after painful APRA news and its FY26 result.
Bendigo Bank is one of the largest non-major banks in Australia.
APRA pain
Bendigo Bank noted today that APRA is imposing licence conditions on the bank relating to significant weaknesses in management of non-financial risk and the required uplift program to improve its performance in this area.
The ASX bank share noted it initiated an anti money-laundering and counter-terrorism financing (AML/CTF) review and this was completed in November 2025.
Bendigo Bank’s plan to address these shortcomings is a “significant undertaking” and is expected to take approximately three years at an initial estimated cost of $70 million. This expense has been included in its FY26 result.
The ASX bank share noted there are three conditions from APRA: preparation of a comprehensive rectification plan in line with APRA’s directions, an appointment of an independent reviewer and implementation of the rectification plan.
FY26 result
Bendigo Bank also announced a summary of its unaudited FY26 numbers for investors to digest along with this news.
The ASX bank share revealed cash earnings after tax grew 3% to $530.2 million.
Pleasingly, the net interest margin (NIM) – how much profit the bank makes on its lending in percentage terms (including the cost of funding those loans) – improved by 7 basis points (0.07%) over the year to 19.5%. The FY26 second half NIM was even better at 1.98%.
Bendigo Bank explained the improvement in the NIM came from improvements in its deposit mix and benefits from term deposit repricing, as well as higher replicating portfolio earnings.
In terms of lending, total lending grew 1.5% over the year to $87.1 billion, with growth of 3.5% in the second half compared to the first half. Residential lending fell 0.4% over the year to $66.4 billion, though rose 1.9% during the second half.
Customer deposits rose 2.2% over the year to $74.1 billion, with 1.1% growth in the second half.
Impressively, the ASX bank share’s operating expenses were down 2.1% over the half, with improvements in the business-as-usual expenses (which were down 1.1% over the half), reflecting the benefit of its ongoing productivity program.
Its credit expense was $15.7 million to reflect the wider economic environment as well as ongoing geopolitical tensions.
Finally, the statutory net profit was $375.1 million. This included the $70 million rectification plan estimate, the $24.8 million (after tax) cost of mostly revaluation impacts in the Homesafe portfolio and the $10.6 million for the proposed $8 million legal penalty and associated legal costs of $2.6 million which were announced on 10 August 2026.
Final thoughts on the Bendigo Bank share price
When I look at the progress of the business over the past 20 years, it’s trading at close to where it was two decades ago.
I like how Bendigo Bank focuses on community banking and gives the country something different. But, it’s disappointing to see the bank is going through these APRA issues when it likely saw so other banks already go through the same issue years ago.
When I invest, I hope to choose names that allow compounding to work its magic, but Bendigo Bank doesn’t seem like one of those names.
I’d like to see the bank put these issues right and then regularly re-invest in its future, even if that means a lower ongoing dividend yield.
For me, there are other ASX dividend shares I’d rather invest in.
