J.P. Morgan Australia FTM 25 May 26 Bendigo and Adelaide Bank and More

Research evidence excerpt

J.P. Morgan Australia FTM 25 May 26 Bendigo and Adelaide Bank and More

Asia Pacific Equity Research

Australia First to Market 23 May 2026

Top Stories

Bendigo and Adelaide Bank (Andrew Triggs) (BEN AU, N)

3Q26 Pillar 3: Slightly better capital, CP top-up still to come

BEN released its 3Q26 trading update more than a month ago (9 April 2026) which revealed strong NIM/profit trends but

appeared to ignore emerging economic concerns given credit impairment expenses were very benign. Today’s Pillar 3 release

confirmed the latter, with loan provisions unchanged qoq and CP coverage stable. We expect a CP top-up in 4Q26 (as other

banks have done), which has driven a 2% downgrade to FY26e cash NPAT. Other data revealed: 1) stable credit quality trends

in Q3 (although mortgage arrears may have bottomed); 2) slightly better-than-expected capital (on data refinement); and 3)

confirmation that lower liquid assets flattered Q3 NIM (we estimate a 2bps qoq benefit; i.e. +4bps UL NIM rise vs +6bps

headline). Our FY27/28 EPS forecasts are also reduced by 2% as we factor in likely lower housing credit growth on Federal

Budget impacts. BEN looks relatively cheap vs the majors but is trading in line with the 5yr average PE rel vs Industrials. With

AML issues remaining an overhang, we retain our Neutral.

Global Research

Daily Economic Briefing (Alex Gallin)

DM Flash PMIs bend under energy shock

The May flash PMI reading for the DM showed signs of weakness: the composite output index fell 0.8pt to 50.3, its lowest level

since Liberation Day (see today’s Focus). The US output index was broadly stable, whereas the rest of the G-4 (Euro area,

Japan, and the UK) all saw more pronounced drops. The manufacturing sector was supportive, possibly still lifted by front-