Remediation and redundancy costs messed with the full year profit of Bendigo and Adelaide Bank, a result warmly received by the equity market all the same.
The net profit fell 13 per cent to A$379 million over the year to June 2019, though the full-year dividend was kept steady at 70.0 cents.
The bank copped A$16.7 million in remediation costs, mostly relating to Bendigo Financial Planning, and $11.9 million in redundancy costs. An IOOF subsidiary, Bridges Financial Services Group, bought the bank's planning business several months ago.
In a climate of low rates and declining industry margins, Bendigo held its net interest margin steady 2.36 per cent over the full year and managed an uplift of two basis points in the second half.
On the plus side Bendigo and Adelaide's efforts in the digital domain look to be doing well.
Its digital banking brand Up - dubbed "Australia's first and largest next-gen bank" by managing director Marnie Baker - is chiefly responsible for the number of "new customers [rising] by almost two-thirds for the full year, and …. net new customers rising four-fold compared to last year; with equivalent growth half-on-half at 239 percent."
Its investment in fintech Tic:Toc (run by a former exec of the bank) is also tearing along, with "$3 billion in assessed applications since launch" and a "75 per cent increase in approval volume in July 2019", compared with the year before.
And this lending portfolio "has had no defaults or credit losses since launch in July 2017".
In a target viewed cynically by banking analysts on yesterday's investor call, Bendigo is aiming for "a cost to income ratio towards 50 percent in the medium term".