Leaders concede risk failures amid a volatile year for regional banking giant
Bendigo and Adelaide Bank has conceded that it has "fallen short" on risk management in a direct admission from chair Vicki Carter and chief executive Richard Fennell (pictured) published in its annual report.
Their comments frame a financial year in which the bank's home lending book also lost ground to the broader mortgage market.
"The conclusion of the financial year presents us with an opportunity to reflect on our achievements and importantly, our areas for improvement, as we continue delivering on our purpose of feeding into the prosperity of our customers and communities," Carter and Fennell wrote.
The concession caps a difficult 12 months for the regional lender.
In November 2025, Bendigo Bank admitted it was disappointed after money laundering deficiencies were found by an independent Deloitte review, triggered after the bank self-reported suspicious activity at one of its branches.
The following month, the bank was hit by regulators over money laundering and risk-management deficiencies, with APRA ordering a $50 million operational risk capital add-on and AUSTRAC commencing a formal enforcement investigation.
Earlier this month, the bank admitted breaching its accountability obligations in relation to a 2023 cyber attack on its Alliance Bank business, proposing an $8 million penalty subject to Federal Court approval.
Days later, Bendigo Bank was scolded by the regulator over risk failures when APRA imposed formal licence conditions, citing "longstanding and pervasive" weaknesses that had persisted despite years of remediation under the bank's internal BEN+ risk transformation program.
"We participated fully and constructively with the review, which was recently completed and resulted in APRA imposing licence conditions on the Bank on 18 August 2026,” Carter and Fennell wrote. “The key requirements of the licence conditions include: preparation of a comprehensive rectification plan in line with APRA's directions; appointment of an independent reviewer; and implementation of the rectification plan. This is a critical priority for the Bank and one we are fully committed to delivering."
The execs pledged to work collaboratively with the regulators to ensure the bank gets its ship in order. “As your Chair and CEO, we accept we have more to do to ensure the Bank is meeting the expectations of all stakeholders in the management of risk and continue playing our part in delivering a stronger banking system for all Australians."
Home lending contracts, business lending picks up slack
Against that backdrop, Bendigo Bank's home lending performance for the financial year ending 30 June showed the bank losing ground.
Residential lending fell 0.4% over the year to $66.4 billion, with the contraction standing in sharp contrast to the broader market: the Reserve Bank of Australia's August 2026 Statement on Monetary Policy recorded total housing credit growth of 7.5% year-on-year in the June 2026 quarter.
The bank's residential lending market share slipped to 2.57%, down 20 basis points from 2.77% a year earlier. Momentum did improve later in the year, with the portfolio growing 1.9% in the second half, while business lending grew 12.5% and agribusiness lending grew 3.8% over the same period.
The bank attributes the fall primarily to its exit from the legacy Mortgage Partners portfolio and reduced volumes through its White Label arrangements, both third-party-originated channels.
That was partly offset by 13% growth in digital mortgages, primarily written through the Up brand, and continued growth in the broker product suite operating on the Bendigo Lending Platform.
Broker fee payments fell $12.8 million over the year, which the bank says reflects reduced commissions following the Mortgage Partners exit rather than a deliberate step back from the broker channel.
The bank remains financially sound, with a Common Equity Tier 1 ratio of 11.34% and cash earnings up 3% to $530.2 million.
But with a three-year, roughly $70 million rectification program now under way and an independent reviewer to be appointed under the new licence conditions, brokers with Bendigo Bank on panel should expect the bank's near-term priority to sit squarely with risk uplift rather than aggressive volume growth in home lending.
Carter and Fennell added: “The identification and management of risk is fundamental to our business and our licence to operate. As your Chair and CEO, we take accountability and are fully committed to addressing the shortcomings of our Bank. Improving our risk management will help us become a stronger and more resilient organisation, while delivering sustainable returns for you, our shareholders.”
