Bendigo and Adelaide Bank : 2021 Annual review

Annual Review 2021

About our front cover

This year's Annual Review cover is dedicated to the resilience, professionalism, and dedication of our people. Without their expertise and efforts, the results and achievements outlined in this document would not have been possible, and importantly, our Bank would not have been able to support our customers, communities and all stakeholders to the extent we have.

Jess Brawn is a Local Engagement Officer at our Mitchell Street branch in Bendigo. Like many of our frontline staff, Jess has been a friendly face for customers - and a connection for our communities - as they navigated the uncertainty of the last 18 months. Jess and the team have ensured the highest levels of safety and hygiene in their branch so that customers can continue to access essential banking services.

Jess works in one of our reimagined branches that brings together our customer, community and digital strengths to reimagine banking for the future. Our Mitchell Street branch includes space for retail pop-ups where local businesses can showcase their products and services (read more about our reimagined branches on page 36). The branch also showcases artwork by local Indigenous artists.

As a purpose-led organisation, our business attracts people who are passionate about community. Throughout COVID-19, our people have been experiencing the same challenges as the wider community, but their adaptability and passion have seen them prioritise the needs of our customers and communities, ultimately contributing to Australia's economic recovery and ongoing resilience.

We know that when we support and invest in our people, our customers, communities and stakeholders benefit the most. We're proud to be sharing more about this investment and commitment in this year's Annual Review.

Contents

1. About the Annual Review
2. Highlights

1. Message from our Chair
2. Message from our Managing Director
3. Our reach
4. Our strategy
5. What matters to us
6. Connecting with our customers

19 Investing in our people

1. Ethical conduct and responsible banking

1. Enabling 21st Century communities

1. Our approach to sustainability

1. Board
2. Executive

Contact us

Bendigo and Adelaide Bank Limited ABN 11 068 049 178

Registered head office The Bendigo Centre Bendigo VIC Australia 3550 Telephone: [phone]

[phone] (if calling from overseas)

Shareholder enquiries

Share Registry 1300 032 762

Email: [e-mail]

Acknowledgement of Country

Bendigo and Adelaide Bank's work is conducted on what was and always will be the land of the Aboriginal and Torres Strait Islander people.

Our head office is located on Dja Dja Wurrung land and we have offices and branches in many parts of the Country.

We acknowledge and pay our respects to the Custodians of these lands, Elders past, present and emerging. We acknowledge the many Aboriginal and Torres Strait Islander peoples who have made an important contribution to this land and community and continue to do so.

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About the

Annual Review

The strength and success of Bendigo and Adelaide Bank has been consistently built throughout 163 years in business, and the care and capability we offer in helping all stakeholders to have the best opportunity to succeed.

With the skills and knowledge that truly reflect the contributions we make to Australian society and its diverse communities, and a trusted reputation, built in both small and significant ways over time, we proudly tell our unique story. This is a story we tell by supporting everyone connected with our organisation to generate prosperity and contribute to building a thriving Australia.

Guided by our vision and purpose, there is a strong connection between our Bank's financial and non-financial performance. This mirrors the interests our shareholders have in our organisation and the role we play in working with stakeholders to create and share value for the long-term as we strive to be Australia's bank of choice.

This Annual Review covers the performance of Bendigo and Adelaide Bank for the period 1 July 2020 to

30 June 2021. Further information about our Annual Review, Annual Financial Report, our Sustainability Report and Corporate Governance Statement can be found at https://www.bendigoadelaide.com.au

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Highlights

Bendigo and Adelaide Bank is committed to operating sustainably from an economic,

social and environmental standpoint, considering the needs and expectations of our stakeholders over the long-term. While our expertise is in delivering best in class financial services, our purpose underpins everything we do. Below are some of our financial and non-financial highlights, as well as milestones we have reached in the 2020/2021 financial year. You can read more about these figures in our Sustainability Report and our Annual Report.

Customers

NPS

+27.3

Number of customers

2 million+

Women in

leadership roles

43.2%

Employee

engagement

score

73%

(June 2021)

Cash earnings

after tax

$457.2

million

Total fully

franked dividend

50 cents per share

Customer growth

9.6%

Top 20

Most trusted

brands

Culture index

74%

(March 2021)

~1,250

people leaders

introduced to

Lead BEN

Statutory net profit

$524

million

Residential lending up

2.8x

system

Customers are at the heart of what we do. We're proud that more and more Australians are choosing to do their banking with us.

Our competitive range of banking products, unique relationship model and friendly customer service are just some of the reasons why our Net Promoter Score continues to sit well above the industry average at 27.3. Our trust rankings also reflect the esteem we are held in by our customers - Roy Morgan ranks us as one of Australia's top 20 most trusted brands.

People

We know that when our people are supported and performing at their best, our customers and community benefit. Investing in capability is critical to the success of our strategy. Since 2015, 89 women have completed our Women in Leadership program. Over the past year, we have made progress in all 10 focus areas of the Australian Network on Disability's Access and Inclusion Index, supported 150 leaders through phase 1 of our Lead BEN deep dive and hosted 101 live webinars designed to up skill our people leaders to manage high performing teams. Our focus on people has contributed to an employee engagement score of 73%.

Financial performance

This year, the Bank announced a statutory net profit of $524 million, up 172 percent for the 12 months ending 30 June 2021.

Cash earnings after tax were $457.2 million, a 51.5 percent increase on the prior financial year. Cash earnings per share were 85.6 cents per share, up 43.4 percent from the 2020 financial year.

We delivered total income on a cash basis of $1,702.5 million, up

1. percent on the prior year. Lending grew overall, with upticks in residential, agribusiness and business lending. Our capital position further strengthened with Common Equity Tier 1 up 32 bps to 9.57 percent, reflecting a well-managed balance sheet and strong risk management, whilst supporting continued lending growth and future investment in transformation. We announced a fully franked final dividend of

1. cents per share, taking the full year dividend to 50 cents per share continuing our history of rewarding shareholders with high yield and long-term returns.

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In the 2020/2021 financial year, we have grown market share, customer numbers, total lending and deposits. Importantly, we have not achieved this at the expense of our commitment to community, our people and our environment, recording strong results against our non-financial targets. More about our progress over the past year is contained within this document. You can also visit bendigoadelaide.com.au/sustainability to view our Annual Financial Report and Sustainability Report.

Carbon neutrality

achieved

June 2021

Reduction in absolute greenhouse gas emissions

20%

"Speaking Up"

resource launched

with over 3,300 individual page views

Established

relationships with Supply Nation and Social Traders

Donations received to support natural disaster recovery

$47million

since Jan 2020

Community Bank

contributions

$21.3

million+

Reduction in travel related emissions

67%

Branches with

rooftop solar

30

93%

small business suppliers paid within

30 days of

invoicing

Lodged our first Modern Slavery statement

Scholarships

funded

274

$7.4 million

in grants

on behalf of community partners

Environment

We recognise climate change has far-reaching risks for the environment, the economy, society, our customers and their communities. We support the Paris Agreement objectives and the required transition to a low carbon economy. Since launching our Climate Change Action Plan, we have reduced our travel related greenhouse emissions by 67%, our absolute emissions by 20% and reached 30 of our branches now fitted with rooftop solar systems. We achieved carbon neutral status in June 2021.

Governance

Robust governance is essential to strong and sustainable growth and success. Not only do we adhere to what is required of us from both a legislative and regulatory standpoint, as a values-based organisation we also seek to do what is right in the eyes of our customers and all of our stakeholders. Our Speak Up resource, encouraging staff to speak up when they see something wrong, has experienced strong take up. Our team is also working through more than 140 compliance and regulatory matters to ensure our offering remains aligned to our longstanding practice of being relevant and fair for customers.

Community

Our Bank is known across Australia for its commitment to community. In 2020-21 we built on this commitment, returning over $270 million to communities through our Community Bank network since 1998. 274 students have been supported through tertiary education with scholarships totalling over $1 million. Our charitable arm, the Community Enterprise FoundationTM continues to support communities affected by natural disasters distributing more than $15.3 million in donations over the past year. This money is part of the staggering $47 million raised in the wake of the Black Summer bushfires.

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