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]

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]

For personal use only Results Presentation For the full year ended 30 June 2025 Released 25 August 2025 Bendigo and Adelaide Bank Limited ABN 11 068 049 178 For personal use only C2 - Internal Use Only 2 2 Agenda | y | | | | | | | --- | --- | --- | --- | --- | --- | | l n | | | | | | | o e | 01 | 02 | 03 | 04 | 05 | | s | | | | | | | u | | | | | | | l a | Overview | FY25 Results | Strategy Update | Q&A | Summary | | n | | | | | | | o | | | | | | | s r | | | | | | | e | Richard Fennell, Chief Executive Offic ...