Bendigo-Adelaide chides proposed ANZ-Suncorp deal

At its 2022 annual general meeting (AGM) held on Tuesday (8 November), Bendigo-Adelaide Bank’s board chair clarified the bank’s position in relation to ANZ Bank’s proposed purchase of Suncorp, stating it would “provide sub-optimal outcomes for customers and communities”.

Speaking in Bendigo, Victoria, to an in-person and online audience in its first-ever “hybrid” AGM and its first AGM since October 2019, board chair Jacqueline Hey, who also sits on the board of Qantas, called out the implications of any proposed Suncorp absorption into ANZ.

“On behalf of the board, I would also like to take this opportunity to address you, our shareholders, regarding comments made by Suncorp Bank — at its AGM in late September — in relation to its proposed sale to the ANZ Banking Group,” Ms Hey stated.

“While our bank remains firmly focused on its organic growth strategy, it does from time to time consider mergers and acquisitions that will create value for shareholders and customers.

“Whilst we do not comment on these type of activities in the normal course of business, given this one is public we do believe it’s important our shareholders are fully aware that Suncorp avoided engagement with our bank — despite repeated approaches — and instead announced a transaction with a big four bank.

“We believe this will only further entrench Australia’s banking oligopoly and provide sub-optimal outcomes for customers and communities.

“The proposed sale of Suncorp to ANZ Banking Group is still to be approved by the relevant federal and state governments and the ACCC, and we await their respective decisions with interest.”

Positive result for 2022 bodes well

In terms of the bank’s financial matters, Ms Hey reiterated to shareholders that, despite the uncertainties and challenges of the previous tumultuous few years (bushfires, the pandemic, and numerous flood events), the bank had “continued to adapt and find new ways to be Australia’s bank of choice.”

“Pleasingly, this resulted in a solid Financial Year 2022 performance, with the bank delivering cash earnings after tax of more than $500 million for the first time in its (its 164-year) history,” Ms Hey explained.

These sentiments on performance were echoed by the bank’s chief executive and managing director, Marnie Baker, with specific mention of its success in the mortgage portfolio.

“As stated at our full year result for Financial Year 2022, we continue to strike a balance between managing volumes and margins, targeting sustainable revenue growth as system credit growth slows. The rising interest rate environment is providing NIM tailwinds to the banking industry, and to ourselves,” Ms Baker outlined.

“Our focus on costs has not wavered against a backdrop of rising inflation and we are managing for positive jaws, and a further reduction in our cost-to-income ratio towards our stated target of towards 50 per cent in the medium term.

“We remain Australia’s most trusted bank, with the most satisfied home loan customers in the country and with Net Promoter Scores the envy of our competitors.

“Our vision — to be Australia’s bank of choice — remains unchanged and we believe our success is driven by our stated purpose to feed into the prosperity of our customers and communities, not off them.

“It’s this unique sense of purpose, combined with our people’s dedication to putting our customers at the very centre of everything they do, that continues to set us apart from other financial institutions.”

Digital and human interaction in future

While much has changed in the world of banking, Ms Baker said she believed there will always be consumer appetite for a genuine and competitive, community-minded alternative, one that is “digital by design, and human when it matters”.

“Last November, the bank also completed the acquisition of Melbourne-based fintech, Ferocia, which has allowed the bank to consolidate ownership of Up — Australia’s highest rated banking app — and deliver its flagship digital home loan product, Up Home,” she said.

“Up Home — our recently launched digital home loan offering — has to date approved $37.6 million in loans and settled $17.7 million.

“Our BEN Express digital home loan product — powered by home loan approvals platform Tic:Toc — settled more than $50 million in loans in Financial Year 2022.

“Providing this level of growth continues in Financial Year 2023, we could see as much as $200 million in loans settled through this channel over the next 12 months.”

Straddling the challenges ahead

As 2023 approaches, a combination of growing inflationary pressures, rising interest rates and wages, a tight jobs market, and general global uncertainty means the economic outlook remains complex, challenging, and in flux, Ms Baker outlined.

“Cash rate increases from the Reserve Bank are beginning to have an impact on property values in some markets and we can expect credit growth to moderate, and competition to remain intense,” she said.

“Taking these headwinds into account, we will continue to manage our costs diligently and focus on strengthening the returns we derive from our investments, so we can continue to future-proof our business and improve overall returns to you, our shareholders.” 

[Related: Bendigo acquires ANZ’s investment lending portfolio]