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ASX announcements
April 29, 2025

Margins and profit on the rise: Q3 FY25 update

BNK Banking Corporation Limited today announced its trading update for the third quarter of FY25 (Q3 FY25), highlighting continued improvements in margins, profitability, and portfolio optimisation.

Strong Financial Performance

  • BNK has continued to build on its positive momentum, delivering strong financial results for the third quarter of FY25:
  • Underlying (unaudited) Q3 FY25 profit after tax was $1.728 million, compared to a loss of $414,000 in Q3 FY24.
  • Underlying (unaudited) year-to-date (YTD) profit after tax reached $3.516 million, improving from a loss of $1.603 million YTD FY24.
  • Statutory (unaudited) Q3 FY25 profit after tax was $1.293 million, compared to a loss of $794,000 in Q3 FY24.
  • Statutory (unaudited) YTD profit after tax was $1.613 million, up from a loss of $2.610 million YTD FY24.

These results reflect BNK’s continued focus on margin expansion, disciplined execution, and sustainable profitability.

Sustainable Growth and Portfolio Optimisation

BNK continues to execute its sustainable growth strategy, achieving strong progress across portfolio optimisation, revenue growth, and capital management:

  • Sale of approximately $220 million in prime residential mortgages to Bendigo Bank, generating $2.0 million in net revenue and ongoing servicing fees.
  • Commercial loan book surpassed $100 million, reflecting BNK’s targeted growth strategy.
  • Net Interest Margin (NIM) improved to 1.65% for Q3 FY25, leading to a YTD NIM of 1.47%, up from 1.39% in H1 FY25.
  • Total deposits of $1.0 billion, representing a 4% decrease from H1 FY25.
  • $26 million in higher-margin lending settlements in Q3, with higher-margin loans now comprising 29% of the total loan book.
  • Deposit to Loan Ratio of 114%, indicating a strong funding position.
  • 90+ day residential loan arrears improved to 0.80%, down from 0.97% in Q3 FY24.
  • Capital adequacy ratio increased to 29.10%, up from 26.98% at 31 December 2024.
  • $42 million in off-balance sheet settlements with Goldman Sachs during the quarter.
  • Net Tangible Assets (unaudited) per share of $1.00.

Higher-margin originations increased significantly, with applications and settlements up more than 400% compared to Q3 FY24.

The strategic sale to Bendigo Bank, along with the Robusta trade completed in the previous quarter, demonstrates BNK’s focus on realising value and delivering sustainable profitability.

Commentary from BNK CEO, Allan Savins

Commenting on the quarter, BNK CEO Allan Savins said:

“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. Our strategic shift towards higher-margin lending, combined with realising value from the portfolio, is not just about immediate gains but about establishing sustainable, long-term profitability in areas where BNK can create shareholder value.”

“BNK is positioned well to navigate the evolving economic landscape with strong capital and liquidity ratios whilst we explore new asset opportunities and evaluate potential partnerships for profitable growth.”

“This quarter’s results underscore BNK’s strategic direction and commitment to delivering ongoing value to its shareholders through disciplined execution, identification of profitable opportunities and strategic agility.”