The ASX-listed lender has reported a lift in originations and higher-margin residential and commercial lending settlements.
BNK Banking Corporation Limited (BNK) has reported continued momentum in its trading update for the first quarter of the financial year ending 30 June 2026 (FY26), highlighting progress across margin improvement, profitability, and portfolio optimisation.
During the September quarter, the ASX-listed lender’s total loan book grew 4.2 per cent to $941 million, including senior secured lending.
BNK also flagged that its commercial loan book now surpassed $160 million.
Higher-margin residential and commercial settlements saw a significant uplift of $56 million, up 273 per cent compared to the first quarter of FY25.
The lender noted these higher-margin balances now comprise 37 per cent of its loan book.
Total deposits were down 1.5 per cent over the quarter to $994 million, but BNK’s net interest margin (NIM) increased to 1.83 per cent (from 1.38 per cent in 1Q25).
Residential home loan arrears have eased slightly, with loans more than 90 days overdue dropping to 1.04 per cent, down from 1.10 per cent at 30 June 2025.
Meanwhile, commercial loan arrears rose slightly, with 90-plus day delinquencies climbing to 1.22 per cent, up from 0.95 per cent at the end of June.
Commenting on the update, BNK CEO Allan Savins described the September quarter as another important step in the lender’s strategic evolution.
“We’ve made good progress across margin improvement, profitability and portfolio optimisation – all while maintaining disciplined execution across the business,” he said.
“Origination in higher-margin lending saw a significant uplift, with both applications and settlements materially ahead of Q1 FY25. This reflects our deliberate strategy to prioritise sustainable, high-yield asset growth across the group with continuing margin improvement.”
Savins also flagged the impact of two senior secured structured credit transactions in the quarter, including its inaugural deal, settled in July.
“These investments support well-established Australian non-bank lenders and reflect BNK’s strategy to diversify credit exposures and scale high-value, capital-efficient opportunities through disciplined funding and strategic partnerships,” he added.
“Our approach to optimising portfolio composition has proven effective, as evidenced by establishing a profitable baseline and the capacity to further invest in the business. We remain focused on controlling our cost of funds and operating expenses.”
BNK also flagged it has completed the sale of its non-core legacy Adelaide Bank loan portfolio to Bendigo Bank, effective 1 October 2025.
“This transaction represents approximately 40 per cent of the legacy portfolio and is expected to deliver operational efficiencies by freeing up capacity within our Operations teams,” he said.
“The portfolio was sold for $2.75 million, reflecting a multiple of 2.5x trailing commissions, and will result in a one-off statutory after-tax loss of approximately $88k to be reflected in Q2 FY26.”
[Related: BNK appoints new COO]
