The bank is reviewing its operations following an internal compliance breach. It has begun cutting jobs and scaling back contractors in an effort to manage the rising costs associated with AML compliance. Although executives have not yet confirmed the total cost of the uplift program, initial figures suggest the budget will fall well below the $60 million spent by a rival bank in a similar case, indicating further financial strain could be expected.
Since August, the bank has reduced its permanent workforce by 3.6%, with headcount dropping from 4777 to 4589. Contractor use has fallen by 30%. These reductions follow the bank's detection of suspicious activity at a branch, which it reported to the nation's financial crime regulator. Since then, independent consultants have been tasked with reviewing the bank’s AML systems.
Despite the decrease in overall headcount, the bank has confirmed that its teams focused on financial crime will not be affected. These teams will continue to receive full support. The leadership wants to improve efficiency while meeting increased regulatory expectations. However, uncertainty remains surrounding the total extent of the required changes, and the potential financial impact is still under review.
At the same time, the bank is pursuing expansion in Queensland through a new acquisition. It has agreed to buy the Royal Automobile Club of Queensland's $2.7 billion loan book and $2.5 billion in deposits. This will add 90,000 new customers and lift its Queensland market share from 15% to 18%.
This combined approach - cutting internal costs while expanding through acquisition - reflects the bank’s strategy to balance regulatory requirements with business growth. However, analysts note that the AML issue may continue to present risks, particularly in the context of high-profile penalties issued to other banks. The final cost of Bendigo’s AML program remains uncertain but could impact its financial outlook in the near future.
