Bendigo Bank flags cautious approach for resi lending drop

Residential lending has shrunk at Bendigo and Adelaide Bank as the non-major banking group flagged its “cautious approach to competitive dynamics in third-party channels”.

In a first-quarter trading update for the three months ending September, the bank reported a 5.6 per cent contraction in residential loan balances over the quarter on an annualised basis, to $65.7 billion.

However, total lending across the group rose 2.9 per cent to $17.2 billion.

The lender suggested that there would be a return to growth in the second half of the financial year.

It flagged, for example, that the group rolled out the Bendigo Lending Platform across all its branch network (except in Victoria and Tasmania, which will have the platform rolled out in November), which it said would help “position the bank for sustainable growth in the second half of this financial year and beyond”.

The platform was first rolled out to the broker channel in 2023.

Bendigo and Adelaide Bank also noted a drop in cash earnings over the September quarter, which narrowed 3.2 per cent compared to the quarterly average in the second half of FY25 as operating expenses increased due to “seasonal factors and several one offs”.

These included higher staff costs, including redundancy costs and a $3.7 million unplanned remediation provision.

When compared to the prior comparative period, cash earnings remained flat.

Customer deposits inched up 0.5 per cent over the quarter to $72.8 billion.

Deposit mix improved over the quarter, with lower cost deposits growing 3.4 per cent year on year, representing 53.0 per cent of customer deposits, while term deposits reduced to 34.7 per cent of customer deposits.

Bendigo said its balance sheet remains “well positioned” for a return to growth in the second half of the financial year.

The trading update comes after the group released its financial results for the full year ending June 2025, which showed that Bendigo grew its loan book by 6.3 per cent to $85.9 billion over the year, with residential lending making up 77 per cent of the total.

Around one-third (34 per cent) of the $18.0 billion in new mortgage flows came through retail lending via the proprietary channel.

[Related: Bendigo Bank enhances agribusiness offering with Rural Bank integration]

Will Paige is a senior journalist at mortgage broking title, Broker Daily. He writes news and features about the Australian broking industry and property market, reporting on regulation, lending trends, banking and emerging technology. Before joining Broker Daily, Will covered M&A and debt financing news at London-based publication TMT Finance. He has previously written about business and finance news for a variety of media brands including Insider Intelligence, The Sunday Times Fast Track and Alliance News.  Contact Will at: This email address is being protected from spambots. You need JavaScript enabled to view it..