Bendigo Bank quietly retires Adelaide Bank brand

Some 15 years after it acquired the regional lender, the Bendigo boss is quietly ending the multi-brand push.

Bendigo Bank is retiring the Adelaide Bank brand it has been using since 2007. Picture: AAP

Bendigo Bank boss Marnie Baker is quietly phasing out the Adelaide Bank brand, more than 15 years after it acquired the regional lender, as part of a broader shake-up in the way it sells loans.

The move is likely to see “Adelaide” dropped from the bank’s official title over time but customers in the South Australian capital are unlikely to notice the change.

For historic reasons, Bendigo has only been using the Adelaide Bank brand in the mortgage broking channel, and has long since rebranded the branch network across South Australia as Bendigo. It also has the Bendigo branding on its Grenfell St corporate office in Adelaide, although that won’t be impacted by the change.

Bendigo and Adelaide Bank CEO Marnie Baker. Picture: Jane Dempster

Baker is currently trialling the technology with select mortgage brokers that allows the loans to be sold under the Bendigo brand. The change is expected to take place over coming months. Bendigo acquired Adelaide as part of a merger in 2007 in a deal that valued the regional bank at $1.9bn.

But for Bendigo it’s more than a simple branding move as it involves moving the brokers off the old Adelaide system onto the main bank’s new automated credit decision and fast-loan processing system. This allows brokers to get a response to standard loan applications in minutes, putting it in the race for new customers while importantly for the bank it sharply lowers costs.

In addition, the push gives Bendigo the chance to sell a wider range of products that it just can’t do under the legacy Adelaide platform. As well as a mortgage, Bendigo plans to use the relationship to offer deposits, transactional banking, business banking or even credit cards. Currently those on an existing Adelaide Bank loan hold on average just 1.7 products, usually a mortgage and an offset account, which is well below industry norms which are closer to 2.5.

“It really opens up a good opportunity for us,” Baker tells The Australian. “By opening up the Bendigo Bank brand to brokers, it means we’re opening up our whole product suite and digital capabilities.”

Low cost bank

The decision is part of Baker’s four-year effort to turn Bendigo into a more credible proposition for investors. Over the decades Bendigo has grown through acquisition and joint ventures but this had made it a high-cost bank to run, with sprawling brands and multiple costly operating systems.

Smaller banks are more vulnerable to higher costs coming from regulation and the need to invest in technology. This adds to the urgency for Baker to tackle Bendigo’s legacy cost structures.

Baker has continued her effort to simplify Bendigo, in the past six months exiting an agribusiness banking venture with Elders to focus Bendigo’s own business lending and also quitting reverse mortgages and superannuation. By the end of the restructure in two years Baker would have sliced Bendigo’s brands from 13 to just three and have the bank working on just one operating platform.

As well as the Community Bank that provides Bendigo with a source of low-cost funding, Baker is spending more on her digital-only bank brand Up that has built up a customer base of 800,000 from a standing start in just a few years. Bendigo has only just switched on digital mortgage processing in Up with $155m now written through the bank.

Baker on Monday posted a 5 per cent drop in first half cash earnings at Bendigo to $268.2m, with revenue hit by higher deposit costs and slowing lending growth. Lending losses drifted up modestly but remain below historic lows. Bendigo declared a first half dividend of 30c a share, up 3.4c. Baker declined to be drawn on discussing Suncorp after Bendigo previously expressing an interest in buying out the Brisbane-based regional. A critical Australian Competition Tribunal ruling is due early Tuesday on whether Suncorp can sell its bank to ANZ.

“We just don’t think that’s a good transaction for competition for consumers … but we’re not going to start to talk about what that (decision) may mean.”

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Originally published as Bendigo Bank quietly retires Adelaide Bank brand