The country’s fifth-biggest retail bank said it made $245 million in unaudited after-tax cash earnings in the five months to November 30, up 22 per cent from a year ago.

Its lending balances were down 0.7 per cent during that time, with residential lending down 0.2 per cent and business lending down 3.0 per cent.

Bendigo and Adelaide said that was from a heightened focus on margin management across both portfolios, as well as slowing residential system growth and an increasingly competitive environment when it comes to business lending.

“At our full-year results in August, we outlined our intent to sharpen our focus and concentrate our efforts on better returns, and to date in the first half of FY23 we have delivered strong growth in cash earnings and an improved return on equity,” said CEO and managing director Marnie Baker.

The bank’s deposit balances are up two per cent over the past five months.

Bendigo said it expects further interest rate rises over 2022/23, with a terminal (peak) cash rate of between 3.5 and 4.0 per cent, up from 3.1 per cent following the Reserve Bank’s latest rate hike last week.

At 2.12pm AEDT, Bendigo and Adelaide shares were up 7.1 per cent to a nearly four-month high of $9.685.

-AAP