Australian regulators crack down on Bendigo and Adelaide Bank's risk management issues (updated)

Bendigo and Adelaide Bank

17/12/2025 22:18

Deloitte review reveals significant deficiencies in risk management

Shares fall 3.2% to eight-month low

Capital charge impacts Bendigo's common equity tier 1 ratio by 17 bps

Adds share move in paragraph 2 and details throughout

Dec 18 (Reuters) - Australia's regulators on Thursday announced measures to address weakness in Bendigo and Adelaide Bank's BEN.AX risk management practices, including a A$50 million ($33.02 million) operational risk capital charge on the bank.

        Shares of the bank slipped as much as 3.2% to a more than eight-month low of A$9.96 as of 2312 GMT.

The Australian Prudential Regulation Authority (APRA) and AUSTRAC said the actions are expected to ensure Bendigo Bank intensifies its efforts to strengthen its non-financial risk management systems and practices.

        "While the non-financial risk, anti‑money laundering spaces are a priority in light of the recent independent report, APRA is concerned that similar weaknesses may exist across the bank," APRA Chair John Lonsdale said.

The capital add-on will remain in place until Bendigo Bank has completed remedial measures and addressed wider concerns to APRA's satisfaction.

        Bendigo said the capital charge is expected to reduce the bank's Level 2 common equity tier 1 ratio by about 17 basis points.

Thursday's decisions follow the results of an independent review by Deloitte into suspected money laundering at one of the bank's branches.

The bank had engaged Deloitte in August and reported the matter to AUSTRAC as well after identifying deficiencies in its anti-money laundering and counter-terrorism financing controls.

        The independent review found significant deficiencies with Bendigo Bank's approach to the identification, mitigation, and management of money laundering and terrorism financing risk.

        "Bendigo Bank has taken a number of steps to improve its risk capability and strengthen its risk culture over the last 12 months; however, I recognise the need to intensify our focus and our efforts," said Bendigo Bank CEO and Managing Director Richard Fennell.

($1 = 1.5140 Australian dollars)

 (Reporting by Sneha Kumar in Bengaluru; Editing by Shailesh Kuber)

 ((Sneha.Kumar@thomsonreuters.com))