• APRA imposes $50 million operational risk capital charge on Bendigo Bank
• AUSTRAC commences enforcement investigation into AML/CTF deficiencies
• Bank to intensify efforts to improve risk management and culture

Bendigo and Adelaide Bank Ltd (ASX: BEN) has announced that the Australian Prudential Regulation Authority (APRA) has determined to apply a $50 million operational risk capital charge on the bank, effective from 1 January 2026. This capital charge is expected to reduce the bank's Level 2 Common Equity Tier 1 (CET1) ratio by approximately 17 basis points. However, the bank's CET1 ratio as at 30 November 2025 was 11.19%, which remains well above the board's target and APRA's definition of 'unquestionably strong'.Additionally, the bank has announced that the Australian Transaction Reports and Analysis Centre (AUSTRAC) has identified serious potential contraventions of the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Act (2006) and has commenced an Enforcement investigation. AUSTRAC has a wide range of possible enforcement actions and has not yet made a decision regarding the appropriate regulatory response, including whether enforcement action will be taken. The bank will continue to engage constructively with AUSTRAC.The bank recognizes the need to intensify its efforts to improve its risk management practices, particularly in the area of non-financial risk. The board and executive team are fully committed to the required uplift in non-financial risk maturity. Cost estimates related to these efforts will be provided to the market when they are determined.

The bank is committed to intensifying its focus and efforts to improve its risk management capabilities and strengthen its risk culture. This includes a focus on non-financial risk management to ensure the bank can continue to protect its customers and deliver on its purpose.