BNK Reports Q3 FY26 Trading Update with Record NIM & Strong Commercial Growth
BNK Banking Corporation Limited (ASX: BBC) today released its trading update for the third quarter of FY26 (Q3 FY26), for the period to 31 March 2026, reporting a record quarterly Net Interest Margin, continued commercial lending growth, and improved arrears across both residential and commercial portfolios.
Highlights
- Underlying (unaudited) Q3 FY26 profit after tax of $621k (Q3 FY25: $1,728k*)
- Underlying (unaudited) YTD profit after tax of $1,058k (Q3 FY25: $3,516k**)
- Statutory (unaudited) Q3 FY26 profit after tax of $414k (Q3 FY25: $1,293k*)
- Statutory (unaudited) YTD profit after tax of $833k (Q3 FY25: $1,613k**)
- Net Interest Margin (NIM) grows to a record 2.11% in Q3 FY26 (Q3 FY25: 1.65%)
- Net Interest Income of $6.30m in Q3 FY26 (Q3 FY25: $5.48m)
- Commercial loan book surpasses $210m — a 100% increase on Q3 FY25
- Total loan book of $984m at 31 March 2026
- Total deposits of $1.027bn at 31 March 2026
- Deposit-to-Loan Ratio of 104%
- NCD program launched, fully repo eligible
- 90+ day residential home loan arrears reduced to 1.00%, down from 1.37% at 31 December 2025
- 90+ day commercial loan arrears reduced to 0.97%, down from 1.84% at 31 December 2025
- Capital Adequacy Ratio of 26.4% at 31 March 2026
- $95 million in Goldman Sachs off-balance sheet settlements in Q3 FY26 (Q3 FY25: $42m)
- Net Tangible Assets (unaudited) per share: $1.00
Q3 FY25 included $1.5m NPAT attributable to the Bendigo Warehouse transaction. **YTD FY25 included $2.0m NPAT attributable to the Robusta and Bendigo Warehouse transactions.
Record NIM Reflects Portfolio Strategy
BNK achieved a quarterly NIM of 2.11% in Q3 FY26, up 46 basis points on Q3 FY25 and the highest recorded in the Company’s recent history. This improvement was driven by the continued growth in higher-margin lending and BNK’s entry into senior secured credit transactions during FY26. Net Interest Income of $6.30m was up 6.0% on Q2 FY26 and 15% on Q3 FY25.
The quarter saw two RBA cash rate increases, and BNK noted that some moderation in NIM is expected in Q4 FY26, reflecting heightened funding competition and the further impact of those rate movements.
Commercial Lending Doubles Year on Year
BNK’s commercial loan book surpassed $210 million during the quarter, representing a 100% increase from Q3 FY25 and reflecting continued selective execution of the Company’s higher-return lending strategy. Commercial lending grew 12% during Q3 FY26 alone. The total loan book stood at $984m at 31 March 2026.
On the deposit side, Term Deposit balances grew 9.5% from Q2 FY26 as customers repositioned into higher-yielding term products, while At-Call balances declined 5.1%. BNK also launched its NCD (Negotiable Certificate of Deposit) program during the quarter, which is fully repo eligible and further strengthens the Company’s funding position.
Arrears Improve, Credit Quality Maintained
Arrears levels improved across both lending portfolios during the quarter. Residential 90+ day arrears fell to 1.00% from 1.37% at 31 December 2025, and commercial 90+ day arrears reduced to 0.97% from 1.84% over the same period. The credit loss provision remained flat for the quarter, demonstrating the resilience of BNK’s loan portfolio and the effectiveness of its risk management practices.
Outlook
Commenting on the Q3 results, Interim CEO Steve Kinsella said:
“The results for the quarter represent continued improvement in the base returns on the portfolio with cautious growth in our loan book. The improvement in NIM and arrears and the enhanced funding program through the addition of NCDs positions BNK well for stronger growth in 2027.”
On the Q4 outlook, Mr Kinsella added:
“We have seen a record high in our quarterly NIM. The recent change in the rate environment, and forward expectations, has created elevated competition in deposit rates which will create some headwinds for continued growth in our margins, though we expect margins to continue to track to our internal medium term targets.”