Bendigo Bank’s mortgage balances fell over FY26, yet broker-originated lending regained momentum in the second half.
Bendigo and Adelaide Bank, the regional lender behind Bendigo Bank and digital bank Up, ended FY26 with a smaller core home-loan book, but a sharp lift in second-half broker-originated settlements helped revive residential lending momentum.
The bank’s home-loan book excluding portfolio funding stood at $64.6 billion at 30 June 2026, down from $65.1 billion a year earlier, although it increased from $63.4 billion at December 2025.
Its broader residential lending portfolio was largely flat across the year, declining 0.4 per cent, as the lender worked through the process of exiting its legacy mortgage partner business.
That exit also reduced total lending balances by $455 million, or 0.7 per cent, according to the bank.
However, Bendigo’s mortgage activity accelerated markedly in the six months to June, with the bank writing $9.1 billion in home loans in 2H26, up from $6.8 billion in the first half, while residential lending grew 1.9 per cent during the period.
Brokers drive second-half revival
Third-party lending accounted for 48 per cent of Bendigo’s 2H26 residential-loan flows, rising from 36 per cent in 1H26 and overtaking retail as the largest source of new mortgage business.
The channel now represents 45 per cent of the bank’s residential portfolio, up from 43 per cent at December 2025.
However, the lender said annual third-party lending was down 5.5 per cent following its exit from the legacy mortgage partner channel.
Retail lending, including loans written through Bendigo’s Community Bank network and company-owned branches, accounted for 37 per cent of second-half residential flows, down from 47 per cent in the first half.
Digital channels—including NRMA, BEN Express, Timely, Qantas and Up - generated the remaining 15 per cent of 2H26 mortgage flows, compared with 17 per cent in 1H26.
Growth trails system
Despite the improved second-half result, Bendigo’s residential growth continued to lag the broader market, with its loans to households increasing 3.9 per cent over the six months to June, compared with system growth of 6.5 per cent.
Total lending across Bendigo rose 1.5 per cent over the year to $87.1 billion and increased 3.5 per cent over the second half.
Residential lending remained the dominant component of the balance sheet, with Victoria accounting for 38 per cent of the portfolio, followed by NSW at 25 per cent, Queensland at 16 per cent, Western Australia at 10 per cent, South Australia and the Northern Territory at 9 per cent, and Tasmania at 2 per cent.
Fixed lending gains ground
The composition of new lending also shifted through the second half.
Owner-occupier borrowers accounted for 73 per cent of 2H26 residential flows, marginally lower than 74 per cent in 1H26, while investors increased their share to 27 per cent from 26 per cent.
Variable-rate mortgages made up 71 per cent of new flows, falling sharply from 94 per cent in the first half, while fixed lending rose to 29 per cent from just 6 per cent, signalling a notable increase in borrowers opting for rate certainty.
First-home buyers represented 6 per cent of second-half residential flows, less than half the 15 per cent recorded in 1H26.
Meanwhile, Bendigo’s average loan balance rose to $480,000 at June, from $473,000 six months earlier.
Residential arrears increased five basis points over the year to 0.87 per cent.
Bendigo also reported 13 per cent annual lending growth through digital channels, while Up’s loan book increased 56.3 per cent to $2.6 billion.
The bank said that it expected its acquisition of RACQ Bank’s loan and deposit book to complete in the first half of FY27.
[Related: APRA seeks $8m Bendigo cyber-control penalty]
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