• Customer numbers trending towards 3 million, Bendigo Bank NPS +24.9 above industry
• Lower cost deposits grew 3.6% to now make up 53.8% of total customer deposits, supported by digital deposit sales of 41.4%
• Operating expenses reduced by 6.4% over the second quarter reflecting a reduction in FTE and higher seasonal cost drivers in Q1

Bendigo and Adelaide Bank reported its H1FY26 results, with key highlights including customer numbers trending towards 3 million and Bendigo Bank's NPS +24.9 above industry. The bank saw lower cost deposits grow 3.6% to now make up 53.8% of total customer deposits, supported by digital deposit sales of 41.4%, up 7.4% for the half. Operating expenses were reduced by 6.4% over the second quarter, reflecting a reduction in FTE and higher seasonal cost drivers in Q1. The bank also reported regaining momentum in residential lending growth with strong application flow in December, and Up achieving its first month of profitability in September, more than six months ahead of plan. Additionally, the bank announced an agreement to acquire RACQ Bank's loan and deposit books, subject to regulatory approvals. The bank also self-reported the shortcomings identified in the management of AML/CTF risk, and is developing a comprehensive action plan with an estimated cost of $70m - $90m over up to three years.

The bank expects further cash rate increases in 2H26, with some margin pressure expected as growth builds. Fixed to variable rate conversions are expected to continue, and the replicating portfolio contribution is forecast to be flat to slightly positive.