Total income was up 2.9 per cent to $873.4 million compared to the same period the previous year.
Managing director and CEO Marnie Baker said the result marked the sixth consecutive half the bank had delivered growth in residential lending.
“The strength of our retail customer franchise is evident in the performance of our consumer bank, delivering its sixth consecutive half of above system home loan growth rising 8.4 per cent compared to 7.6 per cent system growth,” she said.
“We continue to see strong flows in residential lending with settlements in the period up 4.3 percent on the prior half.
“While fixed rate lending has been a strong feature of the mortgage market for most players, including us, more recently there has been a shift to variable rate loans.”
However, overall lending growth fell behind system, driven by seasonal factors in agribusiness and a decline in the bank’s business lending book this half, with total lending growing at 4.3 per cent compared with system growth of 8.3 per cent.
This prompted the bank to this month announce it would merge its business banking and agribusiness divisions to reinvigorate growth.
Marnie Baker
Last year Bendigo Bank also acquired Melbourne-based fintech Ferocia to accelerate its digital strategy following the launch of its mobile digital bank platform Up.
“Our acquisition of technology company Ferocia and Australia’s largest mobile only digital bank Up is a significant milestone for the Bank. It boosts our digital capability and lays the groundwork for future growth as we continue to support communities across Australia through our community bank model,” Baker said in a statement to shareholders this morning.
“Up has 460,000 customers – many of whom are logging onto the app several times a day. We can see that 45,000 of these customers are actively saving for a deposit on a home and we plan to service these savvy, younger customers with our fully digital offering Up Home later this financial year.”
The bank has also begun divesting what it describes as “non-core assets” and disposed of insurance broking business Community Insurance Solutions over the half.
Since the new year it has also sold its invoice financing business and says it will make further announcements on divestments “as they occur”.
“We are also getting on with the job of modernising our bank by removing complexity and creating additional capacity. Our ‘time to decision’ has fallen in both our proprietary and third-party channels with further improvements to come,” Baker said.
“We have moved 13 per cent of applications to the cloud. Automated decision-making technology is now being applied to third party home loan applications and will scale up over the next 12 months.
“Around 25 per cent of sales are coming through digital channels and 66 per cent of customers are active e-banking customers.”
Bendigo and Adelaide Bank has a network of 317 branches across Australia with a strong presence in Victoria and South Australia.
It said that although it had provided assistance to 25,000 customers throughout the pandemic, the recent onset oxjmtzywf the Omicron wave had only led to 25 new retail customers asking for help.
The half-year result follows a statutory net profit of $524 million for the 2020-21 financial year, up from $192.8 million in FY20.
Baker said the strong first-half result showed its strategies were working.
“We are committed to removing complexity, keeping cost growth low and, above all, remaining a customer-centric organisation,” she said.
“Looking ahead, we expect residential loan growth to continue to exceed system growth and the seasonal return of agribusiness growth to drive better near-term lending growth.
“Challenges in the form of margin compression and non-recurring other income are expected to drive revenue lower in the second half. Costs will need to decline for us to continue driving the cost-to-income ratio lower.”
