Bendigo and Adelaide Bank Posts Strong Q3 Earnings, Announces AI-Driven Job Cuts

Bendigo and Adelaide Bank delivered an impressive financial performance in its third quarter, reporting a 12.8% surge in cash earnings to A$137.9 million for the three months ending March 31. The result came in roughly 12% above market expectations according to UBS, driven by expanding margins and robust lending activity across its east coast operations.

The regional lender's net interest margin climbed 6 basis points quarter-on-quarter to reach 1.98%, reflecting improved profitability from its core banking activities. Investors responded enthusiastically, sending shares up 9.5% to A$11.455 — the stock's strongest level since mid-February and the best single-day performance on the ASX200 index.

Alongside its earnings announcement, the bank revealed strategic outsourcing partnerships with Indian IT giant Infosys and U.S. business process firm Genpact. The agreements will reshape the bank's technology and operations workforce, though specific headcount reductions were not disclosed. These partnerships form part of a broader efficiency strategy centered on artificial intelligence and automation, projected to generate annual savings of up to A$75 million by fiscal 2028 — equivalent to approximately 11.5% of the bank's fiscal 2025 staff-related expenditure. Upfront transition costs are estimated between A$85 million and A$95 million.

UBS analysts welcomed the strategic shift, emphasizing that regional banks must pursue technology partnerships to remain competitive against larger institutions with greater scale advantages.

The move reflects a growing global trend of financial institutions turning to AI-powered automation and offshore outsourcing to reduce operating costs. In Australia, this shift has already triggered significant workforce restructuring, with logistics technology firm WiseTech Global announcing cuts of around 2,000 positions earlier this year as part of a major AI-linked reorganization.

Bendigo and Adelaide Bank's latest results and strategic direction signal a clear pivot toward leaner, technology-driven operations in an increasingly competitive banking environment.