There is no bank, neobank or fintech in Australia with as intriguing an option at outflanking the status quo in the Australian financial industry as Bendigo and Adelaide Bank.
Between savvy AI-themed partnerships with Tic:Toc, Up and promised digital originality, the most disruptive Australian regional bank and self-styled "Better big bank" looks more and more to be the disruptor to beat.
The antagonism from the sell-side analysts at yesterday's briefing on the December 2019 half-year profit by CEO Marnie Baker and CFO Travis Crouch is a sideshow in contrast to the certainty in the strategic reset outlined by Bendigo yesterday, with a hefty investment budget to match.
"Accelerated investment across the business in revenue opportunities, partnerships, simplification, automation technology, risk and compliance," with a loose spend ahead was a surprise addition to the Bendigo story, one now overseen by novice chair Jacqueline Hey and her increasingly assured CEO.
"As you know, the broad investment in digital platforms, we've been investing for quite some time," Marnie Baker told Banking Day yesterday.
"We're now talking about acceleration. With so many fintechs and others coming into the market, it's a constant."
Up, the best known of Bendigo's recent digital partnerships is on a roll and is being given a run for is money as a new business engine for the bank by the low-cost mortgage platform that is Tic:Toc, know-how that is not merely best-in-class but "the only one in the world" like it, in Baker's words.
The net operating expense impact from accelerated investment spend is "expected to peak at $80 million in year three - FY2022 - and then decline materially as acceleration phase of investment spend tapers off and as cost efficiencies increase," Bendigo said.
Zeroing in on the cost side, the sell-side set were unable to cajole Crouch or Baker into any guidance on the component of the A$80 million cost bulge in 2022 that will be expensed to the P&L, and the balance capitalised and amortised.
The write-off in this half-year profit of a years' long spend on preparing for "advanced accreditation" on capital - blame APRA as much as the bank - only worsened things between the bank brass and their interrogators on the conference call yesterday
The hopeful and plausible thinking on "revenue growth"; that may be the guts of the shock strategy update from Bendigo.
Up, the leading Aussie neobank brand by a mile, will soon add credit products to its inventory, buttressing the high-margin, home volume mortgage flow cranked up by Tic:Toc.
A long final question for the bank's CEO: "With Tic:Toc and Up, you will be pushing plenty of product. The banking analysts can calm down over the profit in three years' time. You are going to be big."
Baker: "Yes, it's a growth strategy."