Bendigo and Adelaide Bank Ltd (ASX: BEN) shares are jumping on Thursday.
At the time of writing, the ASX bank stock is up 7.5% to $11.24.
Image source: Getty Images
Why is this ASX bank stock jumping?
Investors have been buying the regional bank's shares today after it announced strategic partnerships and released a third-quarter trading update.
According to the release, Bendigo and Adelaide Bank has revealed the second phase of the Productivity Program to accelerate its progress towards its 2030 strategy.
It notes that it is evolving its operating model to be simpler and more efficient, accessing leading global capabilities to drive innovation for customers, and support operational excellence.
Following the Google partnership announced in November, it has now entered into two new strategic partnerships with leading providers of technology services and business operations.
The first is a seven-year technology service partnership with Infosys (NYSE: INFY), which will significantly improve its IT service delivery capability and provide access to enhanced capabilities, software engineering, and AI talent to deliver greater capacity to innovate.
The second is a six-year business operations partnership with Genpact (NYSE: G), which will bring deep expertise in process optimisation and delivery to drive greater productivity and support stronger risk management across the bank.
These changes are expected to result in an annual run rate expense benefit of approximately $65 million to $75 million, which will be realised by FY 2028. However, it also expects to incur upfront transition costs of approximately $85 million to $95 million. The majority of this will be incurred in FY 2027.
The ASX bank stock's CEO and managing director, Richard Fennell, commented:
Decisions that impact our people are never easy. We acknowledge this will be a challenging time for our people and we are committed to lead these changes with care and respect. The operational efficiencies delivered through this change will support our previous stated guidance of business as usual expenses to be no higher than inflation through the cycle.
Trading update
The ASX bank stock also released a trading update this morning.
The bank revealed that it achieved unaudited cash earnings of $137.9 million during the third quarter. This is up 7.6% on the quarterly average during the first half.
Unaudited statutory net profit after tax was $109.4 million in the quarter.
This reflects a 6 basis points increase in its net interest margin to 1.98%, lending growth of 5.6%, and a 4.1% reduction in operating expenses to $305.1 million.
