It’s Up, up and away for Bendigo Bank’s youth-focused digital bank

Bank of Bendigo’s youth-focused digital bank, Up, has recorded its best ever year, brightening the regional lender’s prospects after a retreat in annual profit.

Up’s customer numbers leapt 29 per cent to 1.2 million in the 2025 financial year, the lion’s share off referrals, fuelling an 11 per cent jump across the Bendigo group to 2.9 million customers.

Deposits at Up, founded in 2018, leapt 34 per cent to $2.8 billion in the 12 months to June, while its mortgage lending nearly tripled to $1.7b.

Bendigo shares were 3.6 per cent higher at $13.46 as at 12.40pm.

Up’s strong performance has reassured Bendigo management who see the brand as a key part of the bank’s strategy to attract younger customers and retain them through their banking lives as they migrate through deposits into loans and other more profitable products.

“Most of Up’s customers join when they’re in their late teens or early 20s,” Bendigo chief executive Richard Fennell said.

“Most people at that stage don’t have a lot of savings, so the amount of deposits they have are relatively small.

“As those customers age ... they save more, putting money away for a home or other reasons, a car or a holiday, and we start to see those deposits increase.”

Bendigo ended the year in the red, posting a $97.1m loss after flagging hefty goodwill writedowns last week.

A better measure of its underlying performance, cash profit, was 8.4 per cent lower at $514.6m, supporting an unchanged final dividend of 33¢ a year.

Monday’s announcement closed off what Bendigo acknowledged was a tough year, including a shock first-half profit drop that sent its shares plunging as much as 18 per cent. That 23 per cent profit slump was partly blamed on lower margins resulting from higher funding costs to support Bendigo’s unexpectedly strong lending growth.

“The bank has delivered more moderate growth and stable margins in the second half,” Mr Fennell said on Monday.

“This followed a first half that saw significant demand for our residential lending products exceed our capacity to fund through lower-cost deposits.”

Bendigo has also faced recent criticism over its decision to close 10 branches in regional Victoria, Queensland and Tasmania, with the Financial Sector Union describing the closures as “a slap in the face” for the affected communities.

Bendigo has branches in WA, including 24 Community Bank outlets in regional or remote locations largely exited by the big banks.

Under the Bendigo community bank model established 30 years ago, local branches are established and run through public unlisted companies set up by locals, with Bendigo providing the technology and banking support.