Not a good day to be a Bendigo shareholder apparently, after the smaller bank ($6 billion market cap) posted its half-yearly results for FY25. In short: Profits at Bendigo (ASX:BEN) are down as much as -23%.

Listen to the HotCopper podcast for in-depth discussions and insights on all the biggest headlines from throughout the week. On Spotify, Apple, and more.

Shares, in turn, were down -17.8% to ~$11.00/sh at lunchtime on Monday Sydney time.

Higher funding growth and suppressed margins were pointed to by Bendigo CEO Richard Fennell, who really wanted more to talk about Bendigo’s strengths – and was far more interested in talking about earnings, not profits.

But the market didn’t listen; it had its eyes on the profits, which have sunk to $216M.

A 30cps dividend wasn’t enough to stop a shock drop either, despite that same strategy apparently helping BlueScope on Monday. Still, two different beasts.

Not helping Bendigo either was a climb in OpEx of +5% as “technology inflationary pressures” hit the company, as well as increased investment. Through the half, CET1 remains just shy of 11.2%.

And margins falling -6bps clearly isn’t what bank investors want to see, either. Higher cost deposits were partially blamed for that outcome.

Bendigo isn’t necessarily unfamiliar with volatility when it comes to earnings reports – that’s by way of it being a regional bank outside the Big 4 – but Monday’s sell-off is a clear indicator of market caution.

(Hark your mind back to the U.S.’s 2023 regional banking crisis for an idea of the levels of risk tolerance – it’s the same psychology Down Under.)

As for outlook, Bendigo “[expects] residential arrears to gradually increase and bad and doubtful debts to move toward longer-term averages,” Bendigo’s CEO buried at the end of a statement on Monday.

While the bank expects a better economic environment moving forward, it brought up the prospect of rate cuts, which sounds a lot like Bendigo is just hoping things get better, like pretty much everybody else.

BEN last traded at $11.04.

Join the discussion: See what HotCopper users are saying about Bendigo and Adelaide Bank and be part of the conversations that move the markets.

The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.