Bendigo and Adelaide Bank 3Q26 Pillar 3: Slightly better capital, CP top-up still to come

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Bendigo and Adelaide Bank 3Q26 Pillar 3: Slightly better capital, CP top-up still to come

lf Yearly Forecasts (FYE Jun)

worth highlighting. The CET1 ratio was stable in the period at 11.38%, tracking

Adj. EPS (A$)

slightly ahead of our prior 2H26 estimate. Non-performing exposures appear 2025A 2026E 2027E

to have been broadly stable in the March quarter. Total provisions also appear H1 0.44 0.43A 0.42

stable in the period, indicating no collective provision top-up, unlike peers H2 0.44 0.41 0.42

FY 0.88 0.83 0.84

which increased coverage. Lastly, liquid assets were lower, which would have

artificially boosted the strong NIM in the April 9 print. Style Exposure

• Provision top-up inevitable, in our view. While BEN did not take a CP top-up

in 3Q26 (unlike most other banks), we note that its trading update was provided

very soon after qtr-end. As such, we think this is mostly a timing difference. We

see obvious catalysts to increase provision coverage: 1) potential increased

weighting towards its “significant deterioration” scenario; 2) downgrade to

economic forecasts used in the “Base” scenario; and 3) increase to overlays for

enegy-intensive business sectors, including BEN’s large Agri portfolio.

• House price impact on Homesafe? The Federal Budget has increased fears

about either a correction in housing values, or slowing future house price

growth. While BEN takes unrealised gains/losses on Homesafe below the line,

realised gains (on actual property sales) are taken above the line and these could

be impacted in the event of a prolonged period of price weakness. We note

Homesafe relates to houses (not units) in Sydney and Melbourne only. The

Sydney/Melbourne markets are already the weakest in Australia, with negative