• Leveraging strengths for next phase of growth
• Acquiring RACQ Bank, driving shareholder value
• Optimizing deposit franchise and improving productivity

Bendigo and Adelaide Bank Ltd (BEN) provided an investor update, highlighting its strategic priorities and key initiatives. The bank is leveraging its strengths, including trust and reputation, agility, deposit franchise, and regional presence, to drive the next phase of growth. BEN is acquiring the retail loans and deposits of RACQ Bank, which is expected to be ROE and cash EPS accretive. The acquisition will uplift BEN's lower-cost deposits, improve productivity through integration, and provide greater geographical diversification. BEN is also focused on optimizing its deposit franchise by strengthening its digital deposit capability and increasing lower-cost deposits. Additionally, the bank is driving productivity through operational excellence, external spend optimization, and strategic partnerships, including with Google and AWS. BEN has also identified deficiencies in its anti-money laundering and counter-terrorism financing (AML/CTF) approach and is committed to enhancing its systems, processes, and frameworks to ensure full compliance with regulatory obligations.

BEN expects to achieve ROE above 10% by 2030 and maintain a dividend payout ratio of 60%-80% of cash earnings. The bank's BAU costs are not expected to increase higher than inflation, through the cycle, and productivity is critical to managing cost headwinds and delivering on its targets. BEN aims to improve B&A growth in FY26, grow savings above system, and maintain residential loan growth at or around system in the near term, with the majority funded by lower-cost deposits. The bank expects credit losses of 5-8 bps of loans through the cycle and maintains a CET1 Board target of >10%.

BEN is focused on building scale through innovation, deepening its focus on target customer segments, and futureproofing its risk management capabilities, streamlining its technology foundations, and building a performance-based culture and operating model. The bank is committed to enhancing its AML/CTF systems, processes, and frameworks to ensure full compliance with regulatory obligations.