Rate reduction follows RBA's recent rate cut
Bendigo Bank has announced a 0.25% per annum reduction in variable home loan interest rates, effective March 7. The move comes after the Reserve Bank of Australia (RBA) lowered the cash rate by 0.25% on Feb. 18 – the first rate cut since November 2020.
According to Taso Corolis (pictured above), chief customer officer for consumer banking at Bendigo Bank, said the decision aims to support customers amid shifting economic conditions.
“We know many of our lending customers welcomed the RBA’s recent decision to cut interest rates for the first time since November 2020,” Corolis said. “We’re pleased to pass on the full benefit of this cut to homeowners.”
Bendigo Bank is offering customers a free online Home Loan Health Check and various budgeting tools to help them understand how the rate reduction may impact their finances. Borrowers facing financial difficulties are also encouraged to contact the Mortgage Help Centre or speak with their local branch manager.
The rate reduction also follows Bendigo and Adelaide Bank’s half-year results, which highlighted both growth opportunities and earnings pressures. The bank reported cash earnings of $265.2 million, a 1.1% decline compared to the same period last year and a 9.7% drop from the previous half. Statutory net profit after tax came in at $216.8 million.
Residential lending rose by 5.3% over the half, with branches, including Community Banks, contributing 30% of settlements. The Bendigo Lending Platform accounted for 28%, while digital mortgages made up 19%. However, Bendigo’s latest financial results also showed the bank’s net interest margin fell six basis points to 1.88%, mainly due to higher-cost deposits and wholesale funding expenses.
Operating expenses increased by 5%, partly due to ongoing investment in a multi-year transformation program and technology-related inflationary pressures. The cost-to-income ratio rose by 430 basis points to 61.5%.
Despite these challenges, Bendigo Bank’s customer base grew 4.9% to 2.7 million, with its digital bank, Up, surpassing one million customers. The bank’s Common Equity Tier 1 ratio remained strong at 11.17%, well above its board-approved target.
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