BENDIGO and Adelaide Bank’s net profit for the past financial year slumped by more than 13 per cent to of $376.8 million, due to increased redundancy and remediation costs and an exposure to declining property valuations in Australia’s two largest cities.

Cash earnings after tax of $415.7 million were down 6.6 per cent, while total income of $1.6 billion was steady.

Managing director Marnie Baker said the organisation was on a path towards reshaping the business for the future.

“Earnings for the year were impacted by remediation and redundancy costs. Despite this, we delivered total income of $1.6 billion, in line with the prior year, in an environment of low growth, political uncertainty, subdued consumer confidence and increasing competition.

“Net interest margin was steady year-on-year, and, half-on-half, increased by two basis points, reflecting the active management of margin and volume for both lending and deposits.”

Ms Baker said the bank achieved positive momentum from the implementation of its new strategy, with a strong uplift in performance in key priority markets, particularly half-on-half.”

The banks continued focus on credit quality was reflected in bad and doubtful debts being down 28.8 percent to $50.3 million.

Ms Baker said the changing banking environment was creating opportunity, as was the reshaping of the business and focus on reducing complexity and investing in new capabilities, particularly in customer experience and digitisation.

“Bendigo and Adelaide Bank is consistently ranked as one of Australia’s most trusted brands and the top-rated company for customer experience. This sets us apart and is reflected by the commitment and focus of our staff and our capability to continue to attract new customers.”

New customers were up by almost two-thirds for the full year, and retention increased to 93.5 per cent, resulting in net new customers rising four-fold compared to last year; with equivalent growth half-on-half at 239 per cent.

During the year, the Bank launched Australia’s first and largest next-gen digital bank, Up, which has exceeded initial customer growth expectations.

It also divested Bendigo Financial Planning which serves to further simplify and de-risk the business and deliver cost savings.

Ms Baker said more redundancies within the organisation were likely, as part of the commitment to review and deliver operational efficiencies.

The board declared a final dividend of 35 cents per share, taking the fully franked full year dividend to 70 cents per share, continuing our history of rewarding shareholders with a high yield and long-term returns.