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1 Appendix 4D Half Year Results For the period ended 31 December 2015 Released 15 February 2016 ABN This report comprises information given to the ASX under listing rule 4.2A. Information contained in this report should be read in conjunction with the June 2015 annual financial report.

2 Contents 1 Appendix 4D: half year results 3 3 Statutory half year financial report Company details and reporting period Corporate Information Results for announcement to the market Directors' Report Cash earnings results Directors Net tangible assets per ordinary share Review of operations Details of entities over which control has been gained or lost during the period Significant changes in the state of affairs Details of individual and total dividends Events after balance sheet date Details of any dividend or distribution reinvestment plans in operation Independence of auditor Details of associates and joint arrangement entities Condensed income statement Accounting standards used for foreign entities Statement of comprehensive income Dispute or qualifications if audited Balance sheet Events after balance date Statement of changes in equity Half year financial statements Cash flow statement Notes to and forming part of the financial statements 37 2 Half year results Corporate information Financial highlights Summary of significant accounting policies Income statement Basis of preparation Results commentary Changes in accounting policies Profit Significant accounting judgements, estimates and assumptions Specific items Segment results Interest margin Income tax Income Dividends paid Operating expenses Earnings per ordinary share Lending Return on average ordinary equity Asset quality Cash flow information Bad and doubtful debts Share capital Deposits and funds under management Financial instruments Average balance sheet Contingent assets and liabilities Capital and shareholder returns Events after balance sheet date Assets and capital 19 Directors' declaration Capital adequacy 20 External auditors review report Shareholder returns Dividends Additional notes Analysis of intangible assets Net tangible assets per share Investments accounted for using the equity method Credit ratings Issued capital 25 Appendix 4D: Half year results Period ended 31 December

3 Appendix 4D: Half year results 1.1 Company details and reporting period Bendigo and Adelaide Bank Limited ABN Reporting period - six months ended: 31 December 2015 Previous corresponding period - six months ended: 31 December Results for announcement to the market Income from operations down 0.6% to $781.6 m Profit after tax from ordinary activities attributable to Owners of the Company down 8.2% to $208.7 m Net profit after tax from ordinary activities attributable to Owners of the Company down 8.2% to $208.7 m Dividends - current year 2016 Date Payable Amount per security Interim dividend - fully franked 31 March cents Record date for determining entitlements 3 March 2016 Dividends - previous year 2015 Date Paid Amount per security Final dividend - fully franked 30 September cents Interim dividend - fully franked 31 March cents 1.3 Cash earnings results Cash earnings attributable to Owners of the Company up 2.7% to $223.7 m Cash earnings per share up 1.7% to 48.9 cents See note and for full details Appendix 4D: Half year results Period ended 31 December

4 1.4 Net tangible assets per ordinary share Refer to section of the attached 31 December 2015 half year profit announcement. 1.5 Details of entities over which control has been gained or lost during the period During the financial period there have been no changes to the entities in the Group. 1.6 Details of individual and total dividends Refer to section of the attached 31 December 2015 half year profit announcement. 1.7 Details of any dividend or distribution reinvestment plans in operation Refer to section of the attached 31 December 2015 half year profit announcement. 1.8 Details of associates and joint arrangement entities Refer to section of the attached 31 December 2015 half year profit announcement Accounting standards used for foreign entities Not applicable. Dispute or qualifications if audited This report is based on financial accounts that have been subject to an independent review by our external auditors. There is no dispute or qualification to the financial accounts. Events after balance date No other matters or circumstances have arisen since the end of the half year to the date of this report which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in subsequent financial periods. Half year financial statements Refer to pages 27 to 51 of the attached 31 December 2015 half year profit announcement. Appendix 4D: Half year results Period ended 31 December

5 2. Half year results 2.1 Financial highlights Dec-14 Dec-15 Jun-15 Dec-14 Jun-14 to Half Half Half Half Dec-15 $m $m $m $m $m % Financial performance metrics Profit after tax attributable to Owners of the Company (18.6) (8.2) Profit after tax and before specific items Cash earnings Net interest income (before specific items) (16.7) (2.8) Non-interest income (before specific items) Bad and doubtful debts (9.5) (31.6) Expenses (before specific items) (0.6) (0.1) Financial performance ratios % % % % Cost to income ratio 55.6% 54.9% 55.6% 55.7% % change - Net interest margin before profit share arrangements 2.16% 2.17% 2.24% 2.24% (3.6) Net interest margin after profit share arrangements 1.84% 1.86% 1.93% 1.93% (4.7) Statutory profit and cash earnings ($m) $227.3 $223.7 $217.9 $214.5 $208.7 $196.6 December 2014 June 2015 December 2015 Statutory profit Cash earnings Net interest margin before profit share arrangements (%) 2.24% 2.24% 2.17% 2.16% June 2014 December 2014 June 2015 December 2015 Net interest margin Appendix 4D: Half year results Period ended 31 December

6 2. Half year results (continued) 2.1 Financial highlights (continued) Financial position metrics Dec-14 Dec-15 Jun-15 Dec-14 Jun-14 to Half Half Half Half Dec-15 $m $m $m $m $m % Ordinary equity 4, , , , Retail deposits 47, , , , , Funds under management 4, , , , Loans under management 56, , , , New loan approvals 8, , , , > Residential 5, , , ,424.2 (65.7) (1.3) > Non-residential 2, , , , Total provisions and reserves for doubtful debts Financial position ratios % % % % % change Return on average ordinary equity (after tax) 8.49% 8.19% 9.48% 8.73% Return on average ordinary equity (cash basis) 9.10% 9.00% 9.18% 9.08% Return on average tangible equity (cash basis) 13.15% 13.14% 13.42% 13.38% (10.4) (0.9) (2.0) cents cents cents cents Key shareholder ratios Earnings per ordinary share (statutory basis) Earnings per ordinary share (cash basis) Dividend per share - fully franked % change (8.2) Statutory EPS and cash EPS (cents) December 2014 June 2015 December 2015 Statutory earnings per share Cash earnings per share ROE and ROTE (%) 13.42% 13.14% 13.15% 9.18% 9.00% 9.10% December 2014 June 2015 December 2015 Cash ROE Cash ROTE Appendix 4D: Half year results Period ended 31 December

7 2.2 Income statement For the period ended 31 December 2015 Dec-15 Jun-15 Dec-14 Note $m $m $m Income Interest income 1, , ,518.5 Interest expense (779.8) (846.7) (914.4) Net interest income Total non interest income Share of net profit accounted for using the equity method (0.4) Total income Expense Bad and doubtful debts (20.6) (38.2) (30.1) Operating expenses (445.9) (431.5) (446.5) Profit before income tax expense and specific items Specific interest income items before tax (2.5) (3.0) (3.5) Specific income items before tax 0.6 (2.6) 7.5 Specific expense items before tax (7.3) (7.3) (5.3) Total specific items before tax (9.2) (12.9) (1.3) Profit before income tax expense Income tax expense (99.1) (88.2) (77.4) Profit after income tax expense attributable to the parent Adjusted for: Specific items after tax (15.3) Distributions accrued and/or paid on preference shares - (1.3) (1.3) Distributions accrued and/or paid on step-up preference shares - - (0.9) Amortisation of acquired intangibles after tax Cash earnings Earnings per ordinary share (cents per share) cents cents cents Basic Cash Diluted Franked dividends per share Appendix 4D: Half year results Period ended 31 December

8 2.3 Results commentary Profit Dec-15 Jun-15 Change Dec-14 Change $m $m $m % $m $m % Profit before tax Specific items before tax (3.7) (28.7) Profit before tax and specific items Profit after tax attributable to Owners of the Company (18.6) (8.2) Specific items after tax (4.1) (34.2) (15.3) 23.2 (151.6) Profit after tax before specific items Adjusted for: Amortisation of acquired intangibles after tax (0.1) (1.4) 8.1 (1.0) (12.3) Distributions accrued and/or paid on preference shares - (1.3) 1.3 (100.0) (1.3) 1.3 (100.0) Distributions accrued and/or paid on step-up preference shares (0.9) 0.9 (100.0) Cash earnings after tax Appendix 4D: Half year results Period ended 31 December

9 2.3.2 Specific items The reported profit after tax for the half year ended 31 December 2015 $208.7 million included the following specific items: Dec-15 Jun-15 Dec-14 Before Tax After Tax Before Tax After Tax Before Tax After Tax $m $m $m $m $m $m Items included in interest income Fair value adjustments - interest expense (2.5) (1.8) (3.0) (2.2) (3.5) (2.5) Total specific net interest income items (2.5) (1.8) (3.0) (2.2) (3.5) (2.5) Items included in non interest income Hedge ineffectiveness (2.6) (1.8) Profit on sale of investment in joint venture Total specific non interest income items (2.6) (1.8) Items included in operating expenses Integration costs (7.3) (5.1) (7.0) (5.0) (1.4) (1.0) Impairment of investment in associates (1.5) (1.5) Litigation costs - - (0.3) (0.2) (2.4) (1.7) Total specific operating expense items (7.3) (5.1) (7.3) (5.2) (5.3) (4.2) Items included in income tax expense Income tax benefit relating to mergers and acquisitions Tax impacts relating to prior year impairment losses - (1.4) - (2.8) - - Total specific income tax benefit - (1.4) - (2.8) Total specific items attributable to the Group (9.2) (7.9) (12.9) (12.0) (1.3) 15.3 Specific interest income items Fair value adjustments - the accounting for the business activities of Rural Finance resulted in the recognition of fair value adjustments on the loans and deposits acquired. These fair value adjustments are amortised over the life of the underlying transactions. Specific income items Hedge ineffectiveness - ineffectiveness resulting from hedge accounting. Profit on sale of investment in joint venture - on the 30 November 2014 the Group sold its investment in Strategic Payment Services Pty Ltd resulting in a profit above the original carrying value. Specific expense items Integration costs - costs associated with the integration of the business activities of Rural Finance and Alliance Partners. Impairment of investment in associates - an impairment has been recorded on the investment the Group has in Vic West Community Enterprise Pty Ltd. Litigation costs - costs incurred in relation to the Great Southern legal case, not recovered from insurance claims. Specific income tax items Income tax benefit relating to mergers and acquisitions - tax benefit resulting from tax consolidation matters as a result of previous mergers and acquisitions. Appendix 4D: Half year results Period ended 31 December

10 2.3.3 Interest margin 0.03% 0.03% 0.05% 2.17% 2.16% June 2015 Asset Pricing Equity contribution Liability Mix December 2015 Asset pricing - Pricing pressure continued on all mortgage and business lending products, however was partially offset with the repricing of mortgage loans in the second quarter. Equity contribution - The contribution to margin from net free liabilities and equity reduced, reflecting the lower margin earned by assets funded by these balances, following the second half 2015 cash rate reductions. Liability mix - Strong growth has continued in all at-call products while the value of term deposits has declined. Appendix 4D: Half year results Period ended 31 December

11 2.3.4 Income Dec-15 Jun-15 Change Dec-14 Change $m $m $m % $m $m % Net interest income (16.7) (2.8) Specific items - interest income (2.5) (3.0) 0.5 (16.7) (3.5) 1.0 (28.6) Total net interest income (15.7) (2.6) Other income Fees Asset products (4.1) (11.5) 32.3 (0.9) (2.8) Liability and other products (1.1) (2.3) Trustee, management and other services (0.2) (7.4) 2.7 (0.2) (7.4) Commissions Wealth solutions Insurance (1.6) (15.1) Foreign exchange income Homesafe trust Other (8.2) (29.8) 22.4 (3.1) (13.8) Total other income before specific items Share of net profit accounted for using the equity method (0.4) - (0.4) (4.8) (109.1) Total other income before specific items Specific items - non interest income 0.6 (2.6) 3.2 (123.1) 7.5 (6.9) (92.0) Total income (5.0) (0.6) Comments on total income when compared to the previous corresponding period: Net interest income decreased by $15.7 million, or 2.6%. Refer to for further analysis. $4.2 million has been expensed for the committed liquidity facility for December 2015 (June 2015 $3.0m, December 2014 nil). Fees decreased by $2.2 million, or 2.7%, primarily due to a reduction in interchange fees. Commissions increased by $2.4 million, or 8.1%, due to increased volume of third party products sold, including insurance and commissions received as a responsible entity. Homesafe trust contribution was $23.9 million higher primarily due to strong increases in residential property markets of Melbourne and Sydney and the continued growth and maturation of this portfolio. Other income includes factoring income, franchise fees and telecommunications income. Trading revaluation income decreased by $2.7 million. Specific items decreased by $6.9 million. Refer to for further detail. Non-interest income $m Asset product fees Liability products & other fees Trustee, management & other services Wealth solutions Insurance commissions Homesafe trust contribution December 2014 December 2015 Foreign exchange income Other Appendix 4D: Half year results Period ended 31 December

12 2.3.5 Operating expenses Dec-15 Jun-15 Change Dec-14 Change $m $m $m % $m $m % Staff and related costs Occupancy costs (0.8) (1.6) Information technology costs (2.2) (5.8) Amortisation of acquired intangibles (0.3) (2.9) 11.5 (1.4) (12.2) Amortisation of software intangibles Property, plant and equipment costs (0.2) (3.5) Fees and commissions (0.1) (0.5) Communications, postage and stationery (0.8) (4.5) Advertising and promotion (2.2) (13.8) 17.1 (3.3) (19.3) Other product and services delivery costs Other administration expenses Total operating expenses (0.6) (0.1) Specific items Total expenses Change Change Dec-15 Jun-15 % Dec-14 % Expenses to income % 54.9% % - - Expenses to average assets 1.30% 1.29% % (0.02) (1.5) Number of staff (full-time equivalent) 4,589 4,628 (39) (0.8) 4, Staff and related costs to income % 29.5% % Expenses used in the above ratios are expenses less specific expense items and acquired intangibles amortisation. Income used in the above ratios is income less specific income items. 2 Excludes redundancy costs. Comments on individual expense categories when compared to the previous corresponding period are: Staff and related costs increased by $5.2 million, or 2.2%, due to wage and salary increases effective September Advertising and promotion costs decreased by $3.3 million, or 19.3% as the prior period included the 'Bigger than a Bank' marketing campaign. Operating expenses ($m) Staff and related costs Occupancy costs Information technology costs Fees and commissions Property, plant and equipment costs December 2014 December 2015 Intangibles amortisation Other operating expenses Appendix 4D: Half year results Period ended 31 December

13 2.3.6 Lending Dec-15 Jun-15 Change Dec-14 Change $m $m $m % $m $m % Approvals - by security Residential 5, , ,253.6 (65.7) (1.3) Non-residential 2, , , Total approvals 8, , , Gross loan balance - by security As at As at As at Dec-15 Jun-15 Change Dec-14 Change $m $m $m % $m $m % Residential 38, , , Business Accommodation and food services Administrative and support services Agriculture, forestry and fishing 5, ,009.8 (332.8) (5.5) 5,958.1 (281.1) (4.7) Arts and recreation services (1.2) (1.1) Construction 1, ,100.3 (40.6) (3.7) 1,097.8 (38.1) (3.5) Education and training (2.7) (3.9) 67.5 (1.5) (2.2) Electricity, gas, water and waste services (2.0) (7.5) Financial and insurance services (11.7) (3.0) (131.4) (25.8) Health care and social assistance Information media and telecommunications Manufacturing Mining Other Services Professional, scientific and technical services Public administration and safety (10.0) (9.9) Rental, hiring and real estate services 4, , , Retail trade (49.3) (10.3) (97.1) (18.4) Transport, postal and warehousing (6.1) (3.9) (18.2) (10.8) Wholesale trade Other (5.8) (2.1) Total business 14, ,424.6 (301.8) (2.1) 14,401.5 (278.7) (1.9) Margin lending 1, , , Unsecured (11.0) (1.2) Other Total gross loan balance 55, ,730.5 (185.6) (0.3) 54, Gross loan balance - by purpose Residential 36, , , , Consumer 2, ,677.0 (16.1) (0.6) 2,720.2 (59.3) (2.2) Margin lending 1, , , Commercial 14, ,966.9 (523.6) (3.5) 14,938.9 (495.6) (3.3) Total gross loan balance 55, ,730.5 (185.6) (0.3) 54, Loans under management (gross balance) On-balance sheet 55, ,730.5 (185.6) (0.3) 54, Off-balance sheet loans under management (0.3) (26.0) (3.1) Total Group loans under management 56, ,540.6 (185.9) (0.3) 55, Loans under management represent the gross balance of loans held and managed by the Group categorised as follows: On-balance sheet loans are the gross balance of loans and factoring receivables held by the consolidated Group. Off-balance sheet loans under management represent the gross balance of off-balance sheet loans managed by wholly-owned subsidiaries of Bendigo and Adelaide Bank Limited. Appendix 4D: Half year results Period ended 31 December

14 2.3.7 Asset quality Impaired loans 1 As at As at As at Dec-15 Jun-15 Change Dec-14 Change $m $m $m % $m $m % Full-performing (1.2) (50.0) Part-performing (4.4) (6.0) 95.5 (26.0) (27.2) Non-performing (11.7) (4.7) (41.9) (15.1) Restructured loans , Total impaired assets (24.7) (6.5) Less: specific impairment provisions (117.6) (116.1) (1.5) (1.3) (124.0) Net impaired assets (18.3) (7.1) Portfolio facilities - past due 90 days, not well secured Less: specific impairment provisions (0.6) (0.7) 0.1 (14.3) (0.6) Net portfolio facilities Past due 90 days Well secured (excluding commercial arrangement loans) (21.7) (6.0) (32.4) (8.7) Great Southern portfolio (39.6) (16.9) (116.0) (37.3) Ratios % % % % % Total impaired loans to gross loans 0.64% 0.58% 0.06% 0.69% (0.05%) Total impaired loans to total assets 0.54% 0.49% 0.05% 0.58% (0.04%) Net impaired loans to gross loans 0.43% 0.38% 0.05% 0.47% (0.04%) Provision coverage % 99.1% (9.0%) 83.3% 6.80% 1 A facility is classified as impaired regardless of whether it is 90 days or more past due (arrears) when there is doubt as to whether the full amounts due (interest and principal) will be achieved in a timely manner. This is the case even if the full extent of the loss cannot be clearly determined. 2 Includes loans where the value of the security has reduced below the value of the outstanding loans but repayments are being made in accordance with the loan contract. 3 Includes loans where the value of the security has reduced below the value of the outstanding loans but partial repayments are being made in accordance with the loan contract. 4 Restructured loans are facilities in which the original contractual terms have been modified for reasons related to the financial difficulties of the customer. 5 Provision coverage is total provisions and reserves for doubtful debts - divided by total impaired assets. Appendix 4D: Half year results Period ended 31 December

15 2.3.8 Bad and doubtful debts Dec-15 Jun-15 Change Dec-14 Change Bad and doubtful debts expense $m $m $m % $m $m % Bad debts written off (1.3) (86.7) 2.8 (2.6) (92.9) Provision doubtful debts - expense (14.5) (37.7) 28.4 (4.4) (15.5) Total bad and doubtful debts expense (15.8) (39.5) 31.2 (7.0) (22.4) Less: Bad debts recovered Bad and doubtful debts net of recoveries (17.6) (46.1) 30.1 (9.5) (31.6) As at As at As at Dec-15 Jun-15 Change Dec-14 Change Provisions and reserves $m $m $m % $m $m % Provision for doubtful debts - specific (6.4) (5.1) Provision for doubtful debts - collective (2.0) (3.4) General reserve for credit losses Total provisions and reserve for doubtful debts (0.6) (0.2) Ratios % % % % % Loan write-offs (annualised) to average assets 0.07% 0.11% (0.04%) 0.07% 0.00% Loan write-offs (annualised) to gross loans 0.09% 0.13% (0.04%) 0.08% 0.01% Total provision/reserve for doubtful debts to gross loans 0.58% 0.58% % - Collective provision and GRCL to risk-weighted assets 0.59% 0.59% % 0.03% Specific Collective GRCL Total Movements in provisions and reserves $m $m $m $m Balance at June Provision for doubtful debts expense to profit and loss 26.0 (2.0) Bad debts written off - previously provided for (24.6) - - (24.6) Balance at December Balance at December Provision for doubtful debts expense to profit and loss Bad debts written off - previously provided for (35.0) - - (35.0) Business acquisition - Rural Finance Balance at June Balance at June Provision for doubtful debts expense to profit and loss Bad debts written off - previously provided for (18.6) - - (18.6) Business acquisition - Rural Finance Balance at December Movements in specific and collective provisions are reflected as an expense in the income statement. Movements in the general reserve for credit losses are reflected as an appropriation in retained earnings. Total provisions and reserves for doubtful debts ($m) December 2014 June 2015 December 2015 General reserve for credit losses Collective provisions Specific provisions Appendix 4D: Half year results Period ended 31 December

16 2.3.9 Deposits and funds under management As at As at As at Dec-15 Jun-15 Change Dec-14 Change $m $m $m % $m $m % Deposits and funds under management Deposits 54, , , , Securitisation 4, ,925.9 (724.3) (14.7) 5,150.6 (949.0) (18.4) Managed funds 4, , , Total deposits and funds under management 62, , , , Deposits dissection - $m Retail 47, , , , , Wholesale 6, ,282.6 (647.7) (8.9) 7,580.0 (945.1) (12.5) Securitisation 4, ,925.9 (724.3) (14.7) 5,150.6 (949.0) (18.4) Total deposits 58, ,431.2 (31.5) (0.1) 58, Deposits dissection - % Retail 81.4% 79.1% % 4.2 Wholesale 11.4% 12.5% (8.8) 13.0% (12.3) Securitisation 7.2% 8.4% (14.3) 8.9% (19.1) Total deposits 100.0% 100.0% % - Managed funds dissection - $m Assets under management 2, , , Other managed funds 2, , , Total managed funds 4, , , Assets under management include those funds deposited in the Sandhurst Trustees Limited Common Funds, which are invested in cash, cash enhanced and mortgage investments on behalf of investors. These funds are off-balance sheet. Other managed funds include funds deposited for investment in managed investment products and superannuation funds managed off-balance sheet by Sandhurst Trustees Limited and Adelaide Managed Funds Limited. Also included are portfolios of loans managed by the Bank and third parties who contribute to first loss coverage. Funding mix ($m) Retail deposits and funds under management ($m) 5, % 4, % 4,202 7,580 7,283 6, % 12.5% 7.2% 11.4% 3,808 4,166 4,518 45,376 46,223 47, % 79.1% 81.4% 45,376 46,223 47,563 December 2014 June 2015 December 2015 December 2014 June 2015 December 2015 Retail Wholesale Securitisation On balance sheet Funds under management Appendix 4D: Half year results Period ended 31 December

17 Average balance sheet for the six months ended 31 December December June 2015 Average balances and rates 1 Average Interest Average Average Interest Average Balance 6 mths Rate Balance 6 mths Rate $m $m % $m $m % Interest earning assets Cash and investments 7, , Loans and other receivables 2 55, , , , Total interest earning assets 3 63, , , , Non interest earning assets Provisions for doubtful debts (173.7) (172.1) Other assets 3, ,106.9 Total non interest earning assets 2, ,934.8 Total assets (average balance) 66, ,862.6 Interest bearing liabilities Deposits Retail 47,033.3 (570.6) (2.41) 46,203.2 (621.7) (2.71) Wholesale - domestic 6,811.8 (100.8) (2.94) 6,894.0 (109.4) (3.20) Wholesale - offshore (5.1) (2.96) (6.4) (3.28) Notes payable 4,513.6 (68.4) (3.01) 4,848.7 (77.7) (3.23) Preference shares (18.8) (4.55) (13.8) (4.76) Subordinated debt (16.1) (5.44) (17.7) (5.82) Total interest bearing liabilities 3 60,108.2 (779.8) (2.57) 59,537.8 (846.7) (2.87) Non interest bearing liabilities and equity Other liabilities 1, ,375.9 Equity 4, , , ,324.8 Total liabilities and equity (average balance) 66, ,862.6 Interest margin and interest spread Interest earning assets 63, , , , Interest bearing liabilities (60,108.2) (779.8) (2.57) (59,537.8) (846.7) (2.87) Net interest income and interest spread Net free liabilities and equity Net interest margin Impact of community bank/alliances profit share arrangements Net interest margin Add impact of profit share arrangements Net interest margin before profit share arrangements Average balance is based on monthly closing balances. 2 Loans and receivables excludes specific items (December 15 $2.5m, June 15 $3.0m). 3 Interest payments for profit share arrangements are net values in the Income Statement. 4 Interest spread is the difference between the average interest rate earned on assets and the average interest rate paid on funds. 5 Interest margin is the net interest income as a percentage of average interest earning assets. Appendix 4D: Half year results Period ended 31 December

18 Average balance sheet (continued) for the six months ended 31 December December June 2014 Average Interest Average Average Interest Average Average balances and rates 1 Balance 6 mths Rate Balance 6 mths Rate $m $m % $m $m % Interest earning assets Cash and Investments 7, , Loans and other receivables 2 54, , , , Total interest earning assets 3 62, , , , Non interest earning assets Provisions for doubtful debts (159.6) (145.6) Other assets 3, ,918.3 Total non interest earning assets 2, ,772.7 Total assets (average balance) 65, ,067.2 Interest bearing liabilities and equity Deposits Retail - company 45,252.5 (669.9) (2.94) 43,353.9 (653.7) (3.04) Wholesale - domestic 6,953.2 (116.2) (3.32) 5,726.9 (92.4) (3.25) Wholesale - offshore (9.6) (3.26) (10.6) (3.11) Notes Payable 4,976.2 (88.8) (3.54) 5,486.9 (97.4) (3.58) Convertible Preference Shares (10.1) (5.24) (7.1) (5.49) Subordinated debt (19.8) (6.03) (18.3) (6.02) Total interest bearing liabilities 3 58,800.1 (914.4) (3.08) 56,127.7 (879.5) (3.16) Non interest bearing liabilities and equity Other liabilities 1, ,306.8 Equity 4, , , ,939.5 Total liabilities and equity (average balance) 65, ,067.2 Interest margin and interest spread Interest earning assets 62, , , , Interest bearing liabilities (58,800.1) (914.4) (3.08) (56,127.7) (879.5) (3.16) Net interest income and interest spread Net free liabilities and equity Net interest margin Impact of community bank/alliances revenue share arrangements Net interest margin Add impact of profit share arrangements Net interest margin before profit share arrangements Average balance is based on monthly closing balances. 2 Loans and receivables excludes specific items (December 14 $3.5m, June 14 nil). 3 Interest payments for profit share arrangements are net values in the Income Statement. 4 Interest spread is the difference between the average interest rate earned on assets and the average interest rate paid on funds. 5 Interest margin is the net interest income as a percentage of average interest earning assets. Appendix 4D: Half year results Period ended 31 December

19 Capital and shareholder returns Assets and capital As at As at As at Dec-15 Jun-15 Change Dec-14 Change $m $m $m % $m $m % Group assets 65, ,028.8 (306.3) (0.5) 65, Capital adequacy Total qualifying capital 4, , , Risk-weighted assets 34, ,712.9 (186.4) (0.5) 34, % % % % % Risk-weighted capital adequacy 12.66% 12.57% 0.09% % 0.47% Tier % 10.60% 0.08% % 0.66% Tier % 1.97% 0.01% % (0.19%) (8.8) - Common Equity Tier % 8.17% 0.07% % 0.10% Capital adequacy The Australian Prudential Regulation Authority (APRA) guidelines require capital to be allocated against credit, operational and market risk. Banks must maintain a ratio of qualifying capital (comprising Common Equity Tier 1, Additional Tier 1 and Tier 2 capital), to risk weighted assets. The Bank adopted the "standard model" approach prescribed by APRA to calculate the Bank's capital position. Consolidated Dec-15 Jun-15 Dec-14 Risk weighted capital ratios Tier % 10.60% 10.02% Tier % 1.97% 2.17% Total capital ratio 12.66% 12.57% 12.19% Common Equity Tier % 8.17% 8.14% $m $m $m Regulatory capital Common Equity Tier 1 Contributed capital 4, , ,212.4 Retained profits & reserves Accumulated other comprehensive income (and other reserves) (45.0) (55.0) (56.6) Less: Intangible assets, cash flow hedges and capitalised expenses 1, , ,730.6 Net deferred tax assets Equity exposures Other adjustments as per APRA advice Total common equity tier 1 capital 2, , ,810.8 Additional Tier 1 capital instruments Total Additional Tier 1 Capital Total Tier 1 Capital 3, , ,460.3 Tier 2 Tier 2 capital instruments General reserve for credit losses/collective provision (net of tax effect) Total Tier 2 Capital Total regulatory capital 4, , ,208.8 Total risk weighted assets 34, , ,516.3 Appendix 4D: Half year results Period ended 31 December

20 Capital adequacy (continued) As at As at As at Dec-15 Jun-15 Change Dec-14 Change Risk- weighted assets $m $m $m % $m $m % Credit risk 30, ,094.2 (191.8) (0.6) 31,050.5 (148.1) (0.5) Market risk (95.2) (19.3) (74.1) (15.7) Operational risk 3, , , Total risk-weighted assets 34, ,712.9 (186.4) (0.5) 34, Key movements in capital in the December 2015 half year include: > Common Tier 1 Dividend reinvestment plan - increased capital by $21.6 million. Retained earnings net increase of $19.8 million. Deferred tax assets reduced capital by $18.3 million. Capitalised costs reduced capital by $20.1 million. Capital adequacy (%) 12.19% 12.57% 12.66% 2.17% 1.88% 1.97% 1.98% 2.43% 2.44% 8.14% 8.17% 8.24% December 2014 June 2015 December 2015 Common Equity Tier 1 Additional Tier 1 Tier 2 Capital adequacy is calculated in accordance with regulations set down by APRA. Appendix 4D: Half year results Period ended 31 December

21 Shareholder returns Dec-15 Jun-15 Change Dec-14 Change Earnings per ordinary share cents cents cents % cents cents % Statutory earnings per ordinary share (weighted average) (4.1) (8.2) Cash earnings per ordinary share (weighted average) Diluted earnings per ordinary share (weighted average) (5.6) (11.9) Change Change Weighted average number of ordinary shares 000's 000's 000's % 000's 000's % Weighted average number of ordinary shares - used in basic and cash basis EPS calculations 457, ,569 2, ,363 4, Weighted average number of ordinary shares - used in diluted EPS calculations 535, ,854 24, ,079 36, Change Change Ratios % % % Return on average ordinary equity (after tax) 8.49% 8.19% 0.30% 9.48% (0.99%) Return on average ordinary equity (after tax before specific items) 8.81% 8.70% 0.11% 8.84% (0.03%) Return on average ordinary equity (cash basis) 9.10% 9.00% 0.10% 9.18% (0.08%) Return on average tangible equity (cash basis) 13.15% 13.14% 0.01% 13.42% (0.27%) Return on average assets (after tax) 0.62% 0.60% 0.02% 0.69% (0.07%) Return on average assets (after tax before specific items) 0.65% 0.64% 0.01% 0.65% 0.00% Return on average assets (cash basis) 0.67% 0.66% 0.01% 0.66% 0.01% Cash earnings used in cash basis earnings per ordinary share is profit after tax adjusted for specific items after tax, intangibles amortisation (except intangible software amortisation) and dividends on preference shares. Earnings used in the statutory earnings per ordinary share is, profit after tax including specific items, less dividends on preference shares. June profit figures are for the June 2015 half year and balance sheet items are as at end of June Dilutive preference shares include preference, convertible preference and step up preference shares. Ordinary equity for use in these ratios is represented by total ordinary shares and retained earnings. Tangible equity for use in these ratios is represented by net assets less preference shares and intangible assets. As at As at As at Dec-15 Jun-15 Change Dec-14 Change $m $m $m % $m $m % Ordinary issued capital 4, , , Retained earnings Total ordinary equity 4, , , Average ordinary equity 4, , ,709.6 Appendix 4D: Half year results Period ended 31 December

22 Shareholder returns (continued) Earnings per share and dividend per share (cents) December 2014 June 2015 December 2015 Statutory and cash return on equity - half year Cash EPS Statutory EPS Dividend per share 9.48% 9.18% 9.00% 9.10% 8.49% 8.19% December 2014 June 2015 December 2015 Cash ROE Statutory ROE Dividends Dec-15 Jun-15 Change Dec-14 Change % % Dividend per share - cents Dividend amount payable - $m Payout ratio - earnings per ordinary share % 76.9% (2.3%) (3.0) 66.4% 8.2% 12.3 Payout ratio - cash basis per ordinary share % 70.1% (0.6%) (0.9) 68.6% 0.9% Payout ratio is calculated as dividend per share divided by the applicable earnings per ordinary share. Dividend Reinvestment Plan The Dividend Reinvestment Plan provides shareholders with the opportunity of converting their entitlement to a dividend into new shares. The issue price of the shares is equal to the volume weighted average share price of Bendigo and Adelaide Bank shares traded on the Australian Securities Exchange over the seven trading days commencing 7 March 2016 at a discount of 1.5%. Shares issued under this Plan rank equally with all other ordinary shares. Bonus Share Scheme The Bonus Share Scheme provides shareholders with the opportunity to elect to receive a number of bonus shares issued for no consideration instead of receiving a dividend. The issue price of the shares is equal to the volume weighted average price of Bendigo and Adelaide Bank shares traded on the Australian Securities Exchange over the seven trading days commencing 7 March 2016 at a discount of 1.5%. Shares issued under this scheme rank equally with all other ordinary shares. The last date for the receipt of an election notice for participation in either the Dividend Reinvestment Plan or Bonus Share Scheme for the 2016 interim dividend is 4 March Appendix 4D: Half year results Period ended 31 December

23 2.4 Additional notes Analysis of intangible assets Balance sheet Half year amortisation/ Carrying value Impairment expense Dec-15 Jun-15 Dec-14 Dec-15 Jun-15 Dec-14 $m $m $m $m $m $m Goodwill 1, , , Trustee licence Software Customer lists Core deposits Trade name Customer relationship Management rights - Adelaide Bank Total goodwill and other intangible assets 1, , , Net tangible assets per share Dec-15 Jun-15 Dec-14 Net tangible assets per ordinary share $7.42 $7.36 $7.21 $m $m $m Net tangible assets Net assets 5, , ,954.4 Intangibles (1,628.2) (1,580.5) (1,587.9) Preference shares - face value - - (90.0) Net tangible assets attributable to ordinary shareholders 3, , ,276.5 Number of fully paid ordinary shares on issue - 000's 458, , ,562 Appendix 4D: Half year results Period ended 31 December

24 2.4.3 Investments accounted for using the equity method Ownership interest held by consolidated entity Dec-15 Jun-15 Dec-14 % % % Balance date Joint arrangements Community Sector Enterprises Pty Ltd June Homesafe Solutions Pty Ltd June Silver Body Corporate Financial Services Pty Ltd June Associates Aegis Correctional Partnership Pty Ltd June Aegis Securitisation Nominees Pty Ltd June Aegis Correctional Partnership Trust June Aegis Securitisation Trust June Dancoor Community Finances Ltd June Homebush Financial Services Ltd June Vic West Community Enterprise Pty Ltd June Share of joint arrangements and associates' profits/(losses) before tax Dec-15 Dec-14 $m $m Joint arrangements - Community Sector Enterprises Pty Ltd (0.1) Homesafe Solutions Pty Ltd Silver Body Corporate Financial Services Pty Ltd Associates - Aegis Correctional Partnership Pty Ltd (0.6) - - Aegis Securitisation Nominees Pty Ltd Aegis Correctional Partnership Trust Aegis Securitisation Trust Dancoor Community Finances Ltd Homebush Financial Services Ltd Linear Financial Holdings Pty Ltd Strategic Payments Services Pty Ltd Vicwest Community Enterprise Ltd - (0.1) (0.6) 4.0 Total share of (losses)/profits before tax (0.4) 4.4 Appendix 4D: Half year results Period ended 31 December

25 2.4.4 Credit ratings Short term Long term Outlook Standard & Poor's A-2 A- Stable Fitch Ratings F2 A- Stable Moody's P-1 A2 Stable On 29 July 2015, Standard & Poor s Ratings Services affirmed its long-term counterparty credit rating on Bendigo and Adelaide Bank Limited at A-, and affirmed the short-term rating at A-2. The outlook remains stable. Standard and Poor s commented that the issuer credit ratings on Bendigo and Adelaide Bank Limited reflect the Group s good business stability, which benefits from the franchise strength associated with its Community Bank model, as well as its strong capitalisation and very low credit losses, plus its focus on relatively lower risk residential mortgage lending and a good geographic spread of agricultural loans throughout Australia. On 18 November 2015, Fitch Ratings, the international ratings agency affirmed Bendigo and Adelaide Bank Ltd's long term rating at 'A-', and affirmed the short term rating of 'F2' and its support rating of '3', and the Bank's viability rating of 'A-'. The outlook remains stable. Fitch commented that the ratings reflect the Bank's conservative risk appetite, good asset quality, consistent profitability and strengthened capitalisation. On 6 March 2014, Moody s affirmed its long-term issuer rating at A2 and short term rating at P-1, with a stable outlook. Moody s commented that the rating reflects the Group s well developed franchise centred around community banking and the Group's conservative management that has historically focused on low-risk lending which has contributed to greater asset quality stability over time Issued capital Changes to issued and quoted securities during the period: Ordinary Shares 1 Number of Shares $m Fully paid ordinary shares at 30 June ,566,225 4,235.4 Shares issued: September Dividend reinvestment plan at $ ,031, September Bonus share scheme (in lieu of dividend payment) at $ ,292 - Total ordinary shares at 31 December ,927,970 4, BEN - ASX code Ordinary Fully Paid Shares Appendix 4D: Half year results Period ended 31 December

26 Half Year Financial Report For the period ended 31 December 2015 Released 15 February 2016 ABN This report comprises information given to the ASX under listing rule 4.2A. Information contained in this report should be read in conjunction with the June 2015 annual financial report.

27 3.0 Corporate Information This half year report covers the consolidated entity comprising Bendigo and Adelaide Bank Limited ("the Company") and its subsidiaries ("the Group"). A description of the Group's operations and its principal activities is included in the review of operations and activities in the Directors' Report. The Directors' Report is not subject to audit or review and does not form part of the financial report. Directors Robert Johanson (chairman) Mike Hirst (managing director) Jan Harris (appointed 2 February 2016) Jim Hazel Jacqueline Hey Robert Hubbard David Matthews Deborah Radford Tony Robinson Company Secretary Will Conlan Registered Office Bendigo and Adelaide Bank Limited The Bendigo Centre Bath Lane Bendigo Victoria 3550 Telephone: Facsimile: Principal place of business The Bendigo Centre Bendigo Victoria 3550 Share Registry Securities Registry Bendigo and Adelaide Bank Limited The Bendigo Centre Bendigo Victoria 3550 Telephone: Facsimile: share.register@bendigoadelaide.com.au Auditors Ernst & Young Australia Half year financial report Period ended 31 December

28 3.1 Directors' report Your Directors submit their report for the half year ended 31 December Directors The names of the directors of the Board of Bendigo and Adelaide Bank Limited ("the Company") who have held office during the half year and up to the date of this report are as below. Directors were in office for the entire period unless otherwise stated. Robert Johanson (chairman) Mike Hirst (managing director) Jan Harris (appointed 2 February 2016) Jim Hazel Jacqueline Hey Robert Hubbard David Matthews Deborah Radford Tony Robinson Review of operations The principal activities of the Company and its controlled entities ("the Group") during the financial period were the provision of a range of banking and other financial services, including retail banking, mortgage distribution through third-parties, business lending, rural lending, margin lending, business banking and commercial finance, invoice discounting, funds management, treasury and foreign exchange services (including trade finance), superannuation, financial advisory and trustee services. There was no significant change in the nature of the activities of the Group during the period. The Group recorded an increase in cash earnings during the half year when compared to the previous corresponding period. Total income from operations decreased by $5.0 million, or 0.6%, to $781.6 million when compared with the half year ended 31 December Profit before tax increased by $3.1 million, or 1.0%, to $307.8 million. Profit after tax (attributable to owners of the Company) decreased by $18.6 million to $208.7 million. Group assets increased by 0.5%, or $299.2 million, when compared with the half year ended 31 December Group assets at 31 December 2015 were $65.7 billion. The total capital adequacy ratio increased during the half year from 12.57% to 12.66%. Tier one capital increased during the half year from 10.60% to 10.68%, with Tier two capital increasing from 1.97% to 1.98%. The Common equity tier 1 ratio increased during the half year from 8.17% to 8.24% Fully franked dividends paid on convertible preference shares (CPS) during the half year: cents per share, paid on 14 December 2015 Fully franked dividends paid on convertible preference shares (CPS2) during the half year: cents per share, paid on 30 November 2015 Fully franked dividends paid on convertible preference shares (CPS3) during the half year: cents per share, paid on 15 December 2015 Fully franked dividends paid or declared on ordinary shares during the half year: Final dividend of 33 cents per share, paid on 30 September 2015 in respect of the year ended 30 June 2015 Interim dividend of 34 cents per share, declared on 15 February 2016, payable on 31 March 2016 Half year financial report Period ended 31 December

29 3.1 Directors' report (continued) Significant changes in the state of affairs The following significant changes in the state of affairs of the Group occurred during the half year: In September 2015, 2,031,453 shares were allotted at an issue price of $10.64 to those shareholders participating in the Dividend Reinvestment Plan, increasing share capital by $21.6 million. Further to this, 330,292 shares were allotted under the bonus share scheme. In the opinion of the directors, there were no other significant changes in the state of affairs of the Group that occurred during the half year under review not otherwise disclosed in this report or the financial statements Events after balance sheet date No other matters or circumstances have arisen since the end of the half year to the date of this report which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in subsequent financial periods Independence of auditor The Group's audit committee has conducted an assessment of the independence of the external auditor for the period ended 31 December The assessment was conducted on the basis of the Group's audit independence policy and the requirements of the Corporations Act The assessment included a review of non-audit services provided by the auditor and an assessment of the independence declaration issued by the external auditor for the period ended 31 December The audit committee's assessment confirmed that the independence requirements have been met. The audit committee's assessment was accepted by the full Board. A copy of the auditor's independence declaration as required is set out on the following page and forms part of this report. Signed in accordance with a resolution of the Board of Directors. Robert Johanson, Chairman Bendigo 15 February 2016 Half year financial report Period ended 31 December

30 Ernst & Young Tel: Exhibition Street Fax: Melbourne VIC 3000 Australia ey.com/au GPO Box 67 Melbourne VIC 3001 Auditor s Independence Declaration to the Directors of Bendigo & Adelaide Bank Limited As lead auditor for the review of Bendigo and Adelaide Bank Limited for the half-year ended 31 December 2015, I declare to the best of my knowledge and belief, there have been: i. no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and ii. no contraventions of any applicable code of professional conduct in relation to the review. This declaration is in respect of Bendigo and Adelaide Bank Limited and the entities it controlled during the financial period. Ernst & Young Graeme McKenzie Partner Melbourne 15 February 2016 Luke Slater Partner A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Information contained in this report should be read in conjunction with the June 2015 annual financial report. 30