Bendigo and Adelaide Bank Ltd (ASX: BEN) shares are falling on Friday morning.
At the time of writing, the ASX 200 bank stock are down 4% to $11.30.
This follows the release of the regional bank's third quarter update.
ASX 200 bank stock falls on Q3 update
For the three months ended 31 March, the bank reported net interest income of $416.2 million. This is down slightly compared to the first half quarterly average.
Other income was down 13.6% to $59.5 million for the three months. This was driven by lower completions in Homesafe and lower account keeping fees.
This led to quarterly total income dropping 2.2% to $475.7 million.
Profit decline
Bendigo and Adelaide Bank's net interest margin was flat on the second quarter, with the benefit of repricing activity offsetting the impact of a lower cash rate.
And while operating expenses were 1.2% lower than the first half quarterly average, due to slightly higher investment spend, this couldn't stop the ASX 200 bank stock from recording a 7.8% decline in unaudited cash earnings to $122.2 million.
Commenting on the quarter, Managing Director and CEO, Richard Fennell, said:
Cash earnings are lower this quarter, largely due to lower Other Income, while expenses were below the 1H25 quarterly average. Net interest income was slightly lower than the 1H25 quarterly average with net interest margin flat on the prior quarter. The balance sheet remains well positioned for the current economic outlook with more moderate levels of growth expected in the future. Residential mortgage growth slowed in the last month of the quarter, with the quarterly growth now below 10% annualised.
Deposit growth was steady over the quarter, with transaction accounts declining, while savings accounts (excluding offsets) grew 9.3% annualised on the prior quarter. Business lending growth was driven by Portfolio Funding growth over the quarter.
Fennell also spoke about the migration of the Rural Bank system, which is part of its transformation. He adds:
During the quarter we migrated the Rural Bank system and retired the Rural Bank brand, as we deliver the final phase of our six-year transformation program. We have continued to reduce the number of core banking systems from eight to two, further simplifying our business and technology platforms. We remain focussed on sustainable growth and productivity improvements as we scale the business.
The ASX 200 bank stock is now down 14% since the start of the year.
