Financial Data and Key Metrics Changes - Cash earnings for the full year were $514.6 million, down 8.4% year on year, primarily due to a decrease in noninterest income and higher funding costs impacting margins in the first half [4] - Operating expenses increased by 7.7% year on year, reflecting planned investment spending and inflationary pressures, but only rose 2.1% in the second half [5][30] - The common equity tier one (CET1) capital ratio remained strong at 11%, down 17 basis points from the previous half [36][35] Business Line Data and Key Metrics Changes - The consumer division saw strong mortgage growth of 8% for the full year, but cash earnings remained flat [6] - The business and agri divisions experienced a 10% decrease in cash earnings, primarily due to reduced net interest income amid competitive pressures [7] - The digital EasySaver product launched in February drove a 23% growth in EasySaver balances, contributing to low-cost deposit growth [7] Market Data and Key Metrics Changes - Customer numbers increased by 11%, with the digital bank reaching 1.2 million customers [3] - Digital deposits grew significantly, with Bendigo Bank branded deposits up 58% over the year and UP deposits increasing by 34% [10] - The household deposit to loan ratio stood at 73%, significantly above the industry average [35] Company Strategy and Development Direction - The company is focusing on a refreshed strategy that emphasizes trust, agility, regional presence, and a strong deposit-gathering franchise [38][40] - The strategy includes five pillars aimed at enhancing digital experiences, streamlining operations, deepening customer relationships, and reinforcing community support [41][42] - The company plans to optimize its deposit franchise and enhance productivity to achieve a return on equity (ROE) target of above 10% by 2030 [51][43] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by a competitive environment and the need for disciplined pricing strategies to maintain margins [55][56] - The company expects cash rates to continue their downward trend, impacting net interest margins but aims to stabilize margins through strategic repricing [23][24] - Management expressed confidence in the ability to grow deposits and maintain a strong funding mix to support lending growth [59][60] Other Important Information - The company has invested over $416 million into local communities through sponsorships and grants over the last twenty years, with over $50 million invested this year alone [12] - The company is committed to sustainability and has implemented a climate approach to support decarbonization in various sectors [13] Q&A Session Summary Question: Expectations for margin stability - Management indicated a desire for more stability in margins and discussed the impact of cash rate changes on net interest margins [55][56] Question: Building blocks for the 10% ROE target - Management highlighted the importance of optimizing the deposit franchise and maintaining costs in line with inflation to support ROE growth [58][60] Question: Funding strategy for growth in business and agri - Management discussed plans to enhance digital capabilities for deposit gathering and cross-selling deposit products to existing customers [66][67] Question: Regulatory environment and its impact - Management expressed hope for a more balanced regulatory burden for mid-sized banks, which could support growth [68][69] Question: Trajectory of ROE towards FY '30 - Management acknowledged that achieving the ROE target will require significant effort over the next few years, with expectations of gradual improvement rather than linear growth [72][74] Question: Capital generation and dividend policy - Management reassured that the business can continue to generate organic capital despite a high payout ratio, with expectations of improved profitability [78][79] Question: Monetizing the UP client base - Management noted that UP is expected to contribute positively to the bottom line by FY '27, with plans to expand product offerings to include investment properties [86][88] Question: Margin compression in business and agri - Management acknowledged ongoing price pressure in a competitive market, impacting net interest margins [90][91]