Credit rating summary
Standard & Poor’s
On 27 April 2021, Standard & Poor's Global Ratings revised its outlook on Bendigo and Adelaide Bank to positive from stable and affirmed its long-term counterparty credit rating at 'BBB+' and affirmed the short-term rating at 'A-2'.
The positive outlook on BEN reflects the view that there is a one-in-three possibility that Australian banks will face reduced industry risks in the next two years. S&P consider that the stronger systemwide funding metrics could be sustained despite a modest weakening in the next three years as the COVID-19 driven rise in customer deposits through 2020 unwinds and the RBA’s term funding matures.
S&P expect to raise the long-term issuer credit rating on BEN by one notch to 'A-' if a view is formed that industry risks facing Australian banks have reduced sustainably, all else being equal.
On 16 May 2021, Fitch Ratings revised the Outlook on Bendigo and Adelaide Bank Limited's (BEN) Long-Term Issuer Default Rating (IDR) to Stable from Negative, and affirmed the IDR at 'A-'. BEN's other ratings were affirmed at the same time.
Fitch expects a strong rebound in earnings and profitability metrics in 2021, supported by solid loan growth over the past 18 months, significantly lower impairment charges and a reduction in one-off expenses. Fitch still see some downward pressure on earnings in the medium term from pre-pandemic headwinds, such as low interest rates and high competition. Even so, the bank appears to be tackling these challenges through continued investment in business simplification and digitisation.
On 19 May 2021, Moody's affirmed the 'A3' long-term issuer and senior unsecured debt ratings of Bendigo and Adelaide Bank Limited. Moody's has also affirmed BEN's baseline credit assessment (BCA) of ‘baa1’ and short term rating of 'P-2'. The ratings outlook remain stable.
Moody's noted that BEN's ratings reflect the bank's very strong asset quality, good capital adequacy and good profitability. BEN's asset quality is very strong with relatively low levels of non-performing loans. The bank's non-performing loans ratio was 1.4% as at December 2020. While problems could emerge over the next 6-months as regulatory forbearance measures related to the COVID-19 pandemic have expired, we expect the ultimate level of problem loans and eventual credit losses will be manageable for BEN.
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The Bendigo Centre
PO Box 480
Bendigo VIC 3552
Registered head office
The Bendigo Centre
Bendigo VIC 3550
F: 03 5485 7668