Bendigo and Adelaide Bank Posts 15.48% Total Capital Ratio, 135% Liquidity Coverage
Bendigo and Adelaide Bank has released its Basel III Pillar 3 disclosures for the year ended December 31, 2024, revealing solid capital adequacy and liquidity positions under APRA regulations. The bank maintains robust buffers amid lending growth and evolving market conditions.
- Common Equity Tier 1 ratio at 11.17%, above regulatory minimums
- Total capital ratio increased to 15.48%, reflecting strong capital base
- Liquidity Coverage Ratio steady at 135%, supporting short-term resilience
- Net Stable Funding Ratio improved to 118%, driven by deposit growth
- Risk-weighted assets rose to $38.87 billion, reflecting lending expansion
Capital Adequacy Remains Robust
Bendigo and Adelaide Bank Limited (ASX: BEN) has published its Basel III Pillar 3 disclosures as of December 31, 2024, demonstrating a resilient capital position in line with Australian Prudential Regulation Authority (APRA) standards. The bank reported a Common Equity Tier 1 (CET1) ratio of 11.17%, comfortably exceeding the minimum regulatory requirement of 4.5% plus buffers. This reflects a solid capital foundation, with CET1 capital amounting to approximately $4.34 billion.
Total capital, which includes Tier 1 and Tier 2 instruments, rose to $6.02 billion, translating to a total capital ratio of 15.48%. This increase underscores the bank's proactive capital management amid a growing balance sheet and evolving risk environment.
Liquidity Metrics Signal Stability
Liquidity coverage remains a key focus for Bendigo and Adelaide Bank, with the Liquidity Coverage Ratio (LCR) holding steady at 135% for the December quarter. This ratio measures the bank's ability to meet short-term cash outflows under stress scenarios, and the maintained buffer above the 100% regulatory minimum indicates strong liquidity resilience.
The Net Stable Funding Ratio (NSFR), which assesses longer-term funding stability, improved from 116.9% in September 2024 to 118.0% at year-end. This was driven by growth in customer deposits and term wholesale funding, supporting the bank's funding diversification strategy.
Risk-Weighted Assets Reflect Lending Growth
The bank’s risk-weighted assets (RWA) increased to $38.87 billion, up from $35.37 billion in the previous quarter. This rise is primarily attributed to lending growth, particularly in residential mortgages and other retail portfolios. The bank’s credit risk exposures remain well managed, with non-performing loans stable and specific provisions slightly reduced.
Bendigo and Adelaide Bank continues to apply full Basel III regulatory adjustments as implemented by APRA, ensuring transparency and compliance with prudential standards. The disclosures also detail the composition and features of the bank’s capital instruments, including ordinary shares and subordinated notes, which contribute to the overall capital adequacy.
Outlook and Strategic Implications
As Bendigo and Adelaide Bank navigates a competitive banking landscape, its strong capital and liquidity positions provide a buffer against potential market volatility and regulatory changes. The bank’s ability to sustain capital ratios above minimum requirements while supporting lending growth will be critical to maintaining investor confidence and funding flexibility.
Investors and analysts will be watching how the bank balances growth ambitions with prudent risk management, especially in the context of evolving economic conditions and regulatory expectations.
Bottom Line?
Bendigo and Adelaide Bank’s solid capital and liquidity buffers position it well for sustainable growth, but ongoing vigilance will be key amid rising RWAs and market uncertainties.
Questions in the middle?
- How will Bendigo and Adelaide Bank manage capital ratios if lending growth accelerates further?
- What impact might rising interest rates have on the bank’s credit risk profile and provisions?
- Could the bank’s funding mix shift significantly with changes in wholesale market conditions?