Bendigo Bank’s lending update has revealed renewed contraction, tempering signs of improving momentum across its mortgage business.
Regional lender Bendigo Bank has reported another decline in its loan book, with total lending contracting 3.1 per cent annualised in the September quarter despite improving mortgage application momentum and discharge rates.
The first-quarter FY2026–27 update, released on Monday (19 October), showed residential loan balances fell 0.8 per cent to $66.2 billion, following a second-half FY2025–26 recovery supported by stronger broker-originated lending.
Business lending contracted 12.5 per cent annualised after the departure of a large portfolio funding client.
Excluding portfolio funding, however, business lending increased 3.4 per cent annualised, highlighting the effect of that exit on the headline result.
The bank also pointed to seasonal movements behind a separate decline in its rural lending book, with agribusiness balances contracting 7.9 per cent annualised due to “seasonal outflows”.
Broker-led recovery meets fresh contraction
The latest mortgage decline follows an uneven FY25–26, when stronger second-half activity failed to fully reverse an annual reduction in Bendigo’s core housing book.
Home loans excluding portfolio funding reached $64.6 billion in June 2026, above December’s $63.4 billion but below the $65.1 billion recorded a year earlier.
Across the broader residential portfolio, balances slipped 0.4 per cent over FY25–26 as Bendigo exited its legacy mortgage partner business.
That withdrawal reduced total lending by $455 million, or 0.7 per cent.
Nevertheless, new home loan writing climbed from $6.8 billion in the first half to $9.1 billion in the second, when residential lending expanded 1.9 per cent.
Third-party channels delivered 48 per cent of second-half residential flows, compared with 36 per cent in the first half, displacing retail as the largest source of new mortgage business.
Their share of the outstanding residential portfolio also rose, reaching 45 per cent from 43 per cent in December 2025.
At Bendigo’s 2026 annual general meeting, chief executive and managing director Richard Fennell said most customers remained resilient following four interest rate increases.
He reported that 86.8 per cent of home loan customers maintained a financial buffer, including 43.8 per cent who were at least one year ahead on repayments and around 32.9 per cent two years ahead.
The bank also reported margin pressure, identifying liquidity, wholesale funding and the composition of deposits as contributing factors.
“Net interest margin down 6bps mostly due to temporarily higher liquid assets, higher wholesale funding and an adverse change in deposit mix,” it said.
MONEYME expands personal and car lending
Meanwhile, digital non-bank lender MONEYME reported a $2.24 billion loan book in September, up 36 per cent annually and above June’s $2.08 billion.
First-quarter originations totalled $366 million, increasing 40 per cent from a year earlier, although slightly below the preceding quarter’s $368 million.
Personal loans grew around 58 per cent year on year to $910 million, with September delivering record monthly originations. Its secured car loan book increased by around 28 per cent to $1.25 billion.
The result followed $325 million in originations during Q3 FY25–26, which was 43 per cent above the corresponding quarter and $50 million higher than the December 2025 quarter.
[Related: Mortgage slowdown sharpens tensions over selective cashback offers]
Want to see more stories from trusted news sources?
Make The Adviser a preferred news source on Google.
Click here to add The Adviser as a preferred news source.
