Bendigo Bank Advances Productivity with Infosys and Genpact Partnerships Amid 3Q26 Earnings Growth
Bendigo and Adelaide Bank has announced new long-term partnerships with Infosys and Genpact to enhance technology and operational efficiency, alongside a 7.6% increase in cash earnings for the third quarter of 2026.
- Seven-year technology services deal with Infosys to boost IT capabilities and AI talent
- Six-year business operations partnership with Genpact targeting process optimisation and risk management
- Expected annual expense savings of $65-75 million by FY28 with upfront transition costs of $85-95 million
- 3Q26 cash earnings rose 7.6% to $137.9 million, supported by improved net interest margin and lending growth
- Operating expenses declined 4.1% due to lower staff costs and fewer working days
Strategic Partnerships to Drive Productivity and Innovation
Bendigo and Adelaide Bank Limited (ASX:BEN) has entered the second phase of its Productivity Program, announcing two significant strategic partnerships aimed at accelerating its 2030 strategy. Following a prior collaboration with Google, the bank has secured a seven-year technology services agreement with Infosys and a six-year business operations partnership with Genpact.
The Infosys partnership is designed to enhance Bendigo Bank's IT service delivery, providing access to advanced software engineering and artificial intelligence expertise. Meanwhile, Genpact will contribute deep process optimisation and risk management capabilities to improve operational productivity across the bank.
Financial Impact and Workforce Considerations
These partnerships are expected to generate annual run rate expense benefits between $65 million and $75 million by fiscal year 2028. However, the bank anticipates upfront transition costs of approximately $85 million to $95 million, primarily in FY27. Bendigo Bank has acknowledged that these operational improvements will lead to workforce changes, particularly within its technology and business operations teams, with consultations on roles and team structures ongoing.
CEO and Managing Director Richard Fennell emphasised the difficulty of decisions impacting staff, stating the bank's commitment to managing changes with care and respect. He also noted that the operational efficiencies will support the bank's guidance to keep business-as-usual expenses no higher than inflation through the cycle.
3Q26 Trading Update Highlights Earnings Growth
For the quarter ended 31 March 2026, Bendigo Bank reported unaudited cash earnings of $137.9 million, marking a 7.6% increase over the first half of 2026 quarterly average. Statutory net profit after tax was $109.4 million for the quarter.
The net interest margin (NIM) improved by 6 basis points to 1.98% compared to the previous quarter, benefiting from deposit pricing, Reserve Bank of Australia rate rises, and higher swap rates. Lending growth showed positive momentum with annualised quarter-on-quarter growth of 5.6%, including 4.2% in residential lending and 12.7% in business and agribusiness lending.
Operating expenses decreased by 4.1%, mainly due to reduced staff costs from lower average full-time equivalent employees and fewer working days. Credit expenses were $2.1 million for the quarter, with the bank continuing to monitor geopolitical developments and their potential impact on credit risk.
Positioning Amid Prior Operational and Regulatory Challenges
This update follows Bendigo Bank's recent confirmation of a fully franked 30-cent interim dividend and its Dividend Reinvestment Plan offering a 1.5% discount to shareholders. These financial results and strategic initiatives come as the bank continues to navigate operational risk and regulatory scrutiny, including a $50 million APRA capital charge related to AML/CTF compliance issues reported in late 2025.
In a broader market context, the bank's focus on technology and operational partnerships aligns with its efforts to strengthen risk management and improve efficiency, building on the foundation laid by previous digital and operational investments. The partnerships with Infosys and Genpact represent a continuation of this trajectory, aiming to support sustainable growth and customer responsiveness.
Bottom Line?
Bendigo Bank’s new partnerships signal a strategic push to enhance efficiency and innovation, but near-term transition costs and workforce impacts warrant close monitoring.
Questions in the middle?
- How will the bank manage workforce transitions to minimise disruption and retain key talent?
- What are the specific operational areas targeted for process optimisation under the Genpact partnership?
- How might upfront transition costs affect Bendigo Bank’s profitability and capital position in FY27?
