Key insights
- Bendigo and Adelaide Bank reported strong Q3 earnings driven by wider margins and lending growth. The bank announced job cuts related to AI-driven partnerships with Infosys and Genpact, aiming for significant cost savings by fiscal 2028. While the news boosted the bank's stock in Australia, the broader implication for US equities is slightly negative, reflecting the ongoing trend of AI-related job displacement and potential pressure on labor markets.
April 9 (Reuters) - Australia’s Bendigo and Adelaide Bank reported a 12.8% jump in third-quarter cash earnings on Thursday, buoyed by wider margins and strong lending growth, and confirmed job cuts linked to new strategic partnerships with Infosys and Genpact.
The regional lender, with strong presence on the east coast, posted cash earnings after tax of A$137.9 million ($97.1 million) for the quarter ended March 31, up from A$122.2 million reported a year ago and 12% above market consensus, as per UBS.
Net interest margin rose 6 basis points from the previous quarter to 1.98%.
Shares of one of Australia’s largest regional banks jumped 9.5% to A$11.455, their highest level since mid-February, making the stock the top gainer on the ASX200 benchmark index.
Bendigo and Adelaide said its partnerships with India’s Infosys and U.S.-based Genpact would affect its workforce in its technology and business operations teams, though it did not disclose how many roles would be cut.
The partnerships are part of a broader efficiency drive underpinned by artificial intelligence and are expected to deliver annual benefits of up to A$75 million by fiscal 2028, equivalent to about 11.5% of the staff-related costs incurred in fiscal 2025.
The bank expects upfront transition costs of A$85 million-A$95 million.
UBS said it views the partnerships as a positive, noting that "regional players need to focus on tech partnerships to compensate against scale headwinds," and described the bank’s third-quarter update as a "strong print."
Companies globally have announced thousands of job cuts as investment shifts toward AI-led automation and outsourcing.
In Australia, logistics software firm WiseTech Global said in February it would cut about 2,000 jobs, nearly a third of its workforce, as part of a two-year restructuring plan that could rank among the country’s largest AI-linked layoffs.
($1 = A$1.4198)