Bendigo and Adelaide Bank (ASX:BEN) established a multi-year program of work to address deficiencies in its current non-financial risk frameworks and capabilities after the Australian Prudential Regulation Authority (APRA) imposed license conditions on the lender, according to a Tuesday Australian bourse filing.
The regulator said the conditions were imposed after "findings of longstanding and pervasive weaknesses in the bank's non-financial risk management framework and the failure of the bank's previous efforts to deliver sustainable improvement," according to a separate statement on the same day.
The conditions will require the bank to undertake a rectification program, engage an independent assurer, and provide board attestation. APRA will maintain the bank's existing AU$50 million operational risk capital add-on, which came into effect on Jan. 1, until the watchdog is satisfied that the lender has effectively addressed the underlying prudential concerns.
The program of work is expected to take around three years at an initial estimated cost of AU$70 million, which was included in the 2026 financial year results, the bank said.
It reported unaudited preliminary fiscal 2026 cash earnings after tax of AU$530.2 million, up 3% year-over-year.
For fiscal 2027, Bendigo Bank will revise the basis for financial reporting disclosure, presenting disclosures on a cash basis including and excluding notable items. Programs of work that were previously considered non-cash in fiscal 2026 will be included as notable items in fiscal 2027.
Its shares plunged nearly 9% in recent trading on Tuesday.