The big four banks in Australia dominate market share. But there might also be an opportunity for regional bank shares, like Bank of Queensland Ltd (ASX: BOQ) and Bendigo and Adelaide Bank Ltd (ASX: BEN).
Bank shares have a good history of long-term returns and dividends, especially when the economy is strong. However, with the recent bloodbath on the ASX, it can be tricky to project short-term returns for stocks.
Banking shares largely performed well in 2024. This was led by the big four banks, which command approximately 70% of the total market share in the country's financial sector.
However, after the big four, two of the largest by market capitalisation are Bank of Queensland and Bendigo Bank. These are sometimes referred to as "challenger banks".
For investors looking to invest in regional banks, here's how the two compare.
Bank of Queensland Ltd
Market Cap: $4.17 billion
Dividend Yield: 5.36%
P/E ratio: 15.43.
Unlike other banks in Australia, Bank of Queensland uses an owner-managed branch model. This means that small business owners run branches under BOQ branding.
They are also focused on retail and Small and Medium Enterprise (SME) banking with a regional presence.
At the time of writing, Bank of Queensland shares are trading at $6.30 apiece. They have been relatively resilient this year, falling 5.41% in 2025.
For context, S&P/ASX 200 Financials (XFJ) are down 9% this year, and the S&P/ASX 200 Index (ASX: XJO) is down 10.07%.
Right now, broker Bell Potter seems pessimistic about Bank of Queensland shares. They currently have a target price of $6.00.
Similarly, Macquarie predicted earlier this month that BOQ shares would fall over the year to about $5.75 apiece.
Bendigo and Adelaide Bank Ltd
Market Cap: $5.63 billion
Dividend Yield: 6.33%
P/E Ratio: 12.61
Unlike the big four banks, Bendigo and Adelaide Bank is a regionally focused bank located in Bendigo, Victoria.
In addition to traditional retail banking services, they also focus on unique needs like agribusiness and rural properties.
Shares in Bendigo and Adelaide Bank are currently trading at $9.91 each. However, they have crashed so far in 2025, down 24.12% this year.
Part of this decline could be attributed to the 1HFY25 report that revealed its cash earnings after tax declined by 9.7% compared to the second half of FY24.
Following the disappointing results, Bendigo and Adelaide Bank CEO Richard Fennell said:
We have experienced significantly increased demand for both lending and deposit products from our customers, which has led to the strongest balance sheet growth we have experienced in some years. However, our earnings have been challenged both on the income and expense lines.
With such a big fall already in 2025, is there value to be had for investors?
Brokers tend to think so. Bell Potter has a target price of $10.70, and Macquarie expects the Bendigo share price to be trading at around $10 in 12 months.
