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 non-interest income and higher funding costs impacting margins in the first half [5][17] - 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 [6][30] - The common equity tier one (CET1) capital ratio was 11%, down 17 basis points over the half but still above the board-approved target [36][37] 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 [7] - The business and agri divisions experienced a 10% decrease in cash earnings, primarily due to reduced net interest income from competitive pressures [8] - The digital EasySaver product launched in February drove a 23% growth in EasySaver balances, contributing to low-cost deposit growth [8] Market Data and Key Metrics Changes - Customer numbers increased by 11%, with the digital bank reaching 1.2 million customers, marking the strongest growth since its inception [4] - Digital deposits through Bendigo Bank branded products grew by 58% over the year, while UP deposits increased by 34% [10][29] - The household deposit to loan ratio remained strong at 73%, significantly above the industry average [29][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][39] - 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 [43][51] 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 [56][96] - The company anticipates a gradual improvement in ROE, with significant investments and productivity improvements required over the next two years [71][72] - Management expressed optimism about the potential for improved deposit growth through enhanced digital capabilities and customer engagement [65][99] 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 has implemented a productivity program, with restructuring costs expected to continue as part of a comprehensive strategy [6][19] Q&A Session Summary Question: Margin stability and expectations for the next half - Management expressed a desire for more stability in margins, noting that they have managed pricing effectively despite cash rate impacts [56][57] 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 indicated that improving online deposit account opening capabilities would support growth ambitions in business and agri lending [64][65] Question: Regulatory changes and their impact - Management expressed hope that regulatory changes would reduce burdens for mid-sized banks, allowing for more investment in customer-facing capabilities [67][68] Question: Trajectory of ROE towards FY 2030 - Management indicated that the path to improved ROE would not be linear, with significant efforts required in the next two years [71][72] Question: Capital generation and dividend policy - Management reassured that organic capital generation would improve as the company grows, despite a high payout ratio [76][78] Question: Monetizing the UP client base - Management noted that UP's strong customer satisfaction scores would facilitate growth in home lending as the product offerings expand [85][87] Question: Margin compression in business and agri - Management acknowledged competitive pressures impacting margins but emphasized the importance of strategic pricing and deposit management [89][90]