APRA Imposes License Conditions on Bendigo Bank Over Non-Financial Risk

The Australian Prudential Regulation Authority (APRA) has imposed license conditions on Bendigo Bank due to longstanding and pervasive weaknesses in the bank’s non-financial risk management framework.

The action follows an independent root cause analysis, conducted by Deloitte at APRA’s request, which found that weaknesses were prevalent across the organization and had persisted despite several years of remediation through the bank’s enterprise-wide risk transformation program. The review found that Bendigo Bank lacked a clear, complete, and reliable view of its regulatory obligations, material risks, and key controls. The review also identified material deficiencies in governance, accountability, compliance management, risk oversight, and risk management capability.

The license conditions require Bendigo Bank to undertake a comprehensive rectification program, engage an independent assurer, and provide board attestation that the work has been completed effectively. APRA will also maintain the bank’s existing A$50 million operational risk capital add-on until it is satisfied that the underlying prudential concerns have been addressed.

“Although Bendigo Bank is financially sound, with strong capital and liquidity positions, APRA is concerned with the gaps in its non-financial risk management framework,” said APRA Deputy Chair Therese McCarthy Hockey. “The weaknesses identified by the root cause analysis are significant, longstanding and require decisive action.”