Bendigo Bank Acquires RACQ Bank: Expanding Queensland Footprint

Bendigo and Adelaide Bank is set to acquire RACQ Bank’s retail lending assets and deposits, a move expected to bolster its presence in Queensland and drive shareholder value. The acquisition, announced in December 2025, will bring over 90,000 customers to Bendigo Bank and is targeted for completion in the first half of 2027, subject to regulatory approvals.

Deal Details and Financial Impact

The acquisition encompasses $2.7 billion in retail loans and $2.5 billion in deposits as of June 30, 2025. Bendigo Bank will fund the purchase from its existing cash reserves at book value. The bank anticipates net interest income of $50–$55 million from the acquired lending book and minimal integration costs, estimated at $12–$14 million before tax [The Motley Fool].

Bendigo Bank projects the transaction will increase its return on equity (ROE) by 35–40 basis points and cash earnings per share (EPS) by 4–5 cents annually [The Motley Fool]. The acquisition is expected to use approximately 35 basis points of Common Equity Tier 1 (CET1) capital.

Strategic Rationale and Benefits

This acquisition aligns with Bendigo Bank’s broader growth strategy, enhancing its residential lending exposure, particularly in Queensland. The integration of RACQ Bank’s customer base is expected to drive strategic efficiencies through system consolidation [The Motley Fool]. RACQ’s Managing Director and Group CEO, David Carter, stated the sale allows RACQ Bank members to benefit from being part of a larger bank with increased investment in both digital and face-to-face banking services [RACQ].

Bendigo Bank CEO and Managing Director Richard Fennell emphasized the strong alignment of values between the two organizations and welcomed the opportunity to serve RACQ Bank members from the second half of 2026 [RACQ].

Recent Performance

Bendigo Bank reported a 2.8% sequential increase in cash earnings after tax, reaching $256.4 million. Net interest margins too saw a four-basis-point increase to 1.92%. Customer deposits increased by 1.1% sequentially to $73.7 billion, whereas total funding decreased by 1.6% to $93.6 billion.

Looking Ahead

The acquisition of RACQ Bank represents a significant step in Bendigo Bank’s growth trajectory. By expanding its customer base and strengthening its position in Queensland, the bank aims to deliver increased returns and sustainable loan growth. The onboarding process, alongside the integration of Adelaide Bank customer accounts, will be a key focus for Bendigo Bank in the coming years.