BNK’s lending portfolio grew modestly during the financial year 2026, as it expanded its commercial lending exposure and moved away from lower-margin lending.
BNK Banking Corporation, the ASX-listed banking group behind non-bank lender Better Choice, grew its loan book to $954 million in the year to 30 June 2026, up from $903 million a year earlier.
Including senior secured investments, the group’s total loan portfolio reached $994 million at year end, representing 10 per cent growth on the prior financial year.
The result was also slightly ahead of the $983 million reported at 31 December 2025, although below the $1.37 billion reported at June 2024.
The residential book stood at $707 million at 30 June, while commercial lending increased 82 per cent over FY26 to $247 million.
BNK said its portfolio movement reflected a deliberate focus on margin improvement, with the group pursuing more higher-yielding lending opportunities while reducing exposure to lower-return products.
Commercial loans accounted for 25 per cent of the portfolio at June, up from 15 per cent a year earlier.
Full-documentation residential lending, meanwhile, represented 53 per cent of the book, down from 67 per cent, while alt-doc residential lending was unchanged at 18 per cent.
BNK CEO Steve Kinsella said the group’s full-year performance reflected its effort to improve returns while maintaining a measured approach to asset growth.
“The full year result demonstrated delivery of our focus on improving margins and returns while seeking selective growth in the balance sheet,” Kinsella said.
Commercial expansion changes mix
The shift in BNK’s loan book comes as lenders compete strongly for residential mortgage volume in a slower-growth market.
Kinsella said prospective policy changes affecting property investment were contributing to caution among borrowers.
“Budget changes impacting CGT on investments, negative gearing and SMSF borrowing are contributing to cautious investor sentiment,” he said.
“Continued competition for loans across all categories is unlikely to ease with subdued overall market growth.”
BNK’s residential portfolio remained predominantly owner-occupied, with owner-occupiers accounting for 62.6 per cent of balances and investors representing 37.4 per cent, unchanged on FY25.
Across residential lending, 45.5 per cent of borrowers were ahead on their loans, while 56.6 per cent were on time, and 0.93 per cent were in arrears.
Within commercial lending, 20.6 per cent of borrowers were ahead, 77 per cent were on time, and arrears represented 1.55 per cent.
Serious arrears also improved year on year, with residential loans more than 90 days in arrears falling to 0.47 per cent at 30 June, from 1.20 per cent a year earlier and commercial 90-plus-day arrears declining to 0.87 per cent, from 0.95 per cent.
Principal-and-interest loans continued to dominate the residential portfolio, accounting for 81.8 per cent of balances, while 18.2 per cent were interest-only.
Investment weighs on statutory result
Despite the loan-book growth and improved portfolio mix, BNK recorded a statutory net loss after tax of $3.7 million for FY26, down 389 per cent on the prior year.
The group attributed the result largely to a $3.5 million goodwill impairment.
BNK also reported higher costs as it builds capability and begins a technology transformation intended to support future growth through its broker and customer channels.
“Our cost growth represents an increase in overall capability to deliver on the strategy as well as the early stages of a transformational technology investment,” he said.
“This investment will significantly uplift our broker partner and customer experience to drive further volume growth.”
[Related: BNK trims book amid push into higher margin lending]
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