Australian banks shrugging off U.S. banks concerns

The recent turmoil among U.S. regional lenders has renewed debate about the resilience of smaller banks worldwide but in Australia the picture looks better as results from Bank of Queensland, Bendigo and Adelaide Bank, and Judo Bank show good credit quality and disciplined cost management.

BOQ Group (ASX: BOQ) 

BOQ Group had a solid FY25 as It posted a 12% jump in cash earnings after tax to about $383 million and statutory NPAT came in at $133 million. This was mainly helped by tight cost control and better margins. 

Return on equity went up by 70 basis points to 6.4% and return on tangible equity rose 80 basis points to 7.9% showing profit levels getting better. The bank declared a fully franked dividend of 38 cents per share which is 12% higher than last year.

The bank also kept pushing its transformation plan which includes simplifying systems, going more digital and expanding business lending. 

BOQ’s liquidity coverage ratio stands at 143% and its net stable funding ratio is 124% which both show a strong funding position. The bank also kept asset quality steady through careful provisioning. Going into FY26 the management plans to keep improving the balance sheet, boost digital lending and finish the last part of its $250 million productivity project.

Bendigo and Adelaide Bank (ASX: BEN) 

managed to post a solid FY25 result even though the whole banking industry faced margin pressure and slower credit growth. 

The bank made cash earnings after tax of around $514.6 million which is 8.4% lower than last year because of higher operating expenses and a goodwill impairment charge. Its net interest margin stayed steady showing good pricing control and stable loan growth. 
The bank also paid a fully franked dividend of 33 cents per share which is equal to a payout ratio of 74.8%.

Total lending went up by 2.7% to $85.9 billion thanks to growth in business, agribusiness and home loans. Customer deposits increased 6.6% to $72.9 billion helped by the Community Bank network and its fast-growing digital arm Up, which now has about 1.2 million users. 
Going forward, the bank aims to grow low-cost deposits, cut costs using technology and reach a return on equity above 10% by 2030. 

Judo Bank (ASX: JDO) 

is keeping up its momentum as a specialist SME bank and is growing fast again in FY25.
The bank’s gross loans and advances went up by 16% to $12.5 billion, which is almost double the growth rate of the overall sector. 

Its net interest margin improved to 2.93% and even touched 3.04% in the second half because of better lending margins.

Profit before tax increased by 14% to $125.6 million and statutory NPAT jumped 24% to $86.4 million showing how well it managed its costs and operations.

Deposits rose 20% year on year, crossing $10 billion with help from new retail, SMSF and wholesale products. Judo moves into FY26 focusing more on SME lending, improving deposits mix and pushing return on equity into double digits.

(Source: Company Announcements)