My name is Richard Fennell, and I'm the Chief Customer Officer for Consumer Banking. I'm also the executive with responsibility for our Reconciliation Action Plan.
Our collaboration between myself and organizations is learning. The importance of a RAP is reconciliation in action. What are they identifying that needs rectifying or needs reconciliation? What are they identifying as actions for them to move forward? And one thing for reconciliation, it talks about wal king with Aboriginal community members. It's walking with us, walking with Country.
Our Reflect Reconciliation Action Plan marks the beginning of our journey to better understand the true histories of our First Nations peoples and to further reconciliation in Australia, something that we are wholeheartedly committed to as an organization.
It's heartening to see the Bendigo Bank recognizing the past wrongs and committing to move forward towards reconciliation, towards stronger relationships with Aboriginal people. We look forward to deepening the relationship between the Dja Dja Wurrung group and the Bendigo and Adelaide Bank.
There's a real opportunity for us to both broaden and deepen relationships with First Nations people through the Reconciliation Action Plan. Obviously, community is central to the way we operate as a bank, and it's important that we take into account Aboriginal and Torres Strait Islanders' roles within those communities in how we build those relationships. We already do quite a lot in local communities with First Nations people, including internships, scholarships, but this will provide an opportunity to make sure we do that in a much more coordinated way going forward, and also broaden that to be available right across the network.
This is about all of us working together to put into place actions that allow us to learn and reflect about the contribution that Aboriginal and Torres Strait Islanders have made to this community as a whole, and hopefully more locally in the communities in which you operate.
Welcome to the 2023 Bendigo and Adelaide Bank Annual General Meeting. Now, our Chair, Jacqueline Hey.
Good morning, everyone. I'm Jacqui Hey, chair of the Bendigo and Adelaide Bank, and I'm also obviously a fellow shareholder of the bank. The time is just after 11 A.M., and we do have a quorum, so I'm very pleased to declare the bank's 2023 annual general meeting open. I take this opportunity to acknowledge the Traditional Owners of the many lands on which we're all meeting. I recognize their continuing connection to land, water, culture, and community, and I pay my respects to Elders, past, present, and emerging. I'm currently on the traditional lands of the Dja Dja Wurrung and the Taungurung peoples of the Kulin Nation, the traditional custodians of this land and waterways, including the Loddon and Avoca rivers in the Bendigo region. We would like to welcome each and every one of you joining us today.
For those who are joining us remotely, who are deaf or hard of hearing, closed captions are provided. However, to activate these, you will need to click CC button on the bottom of your screen. A hearing loop is available for those here at the Capital Theatre who need some assistance. For those of you who are vision impaired or listening via the telephone, I'm happy to provide you with an audio description of myself and the surroundings in the studio. I'm standing here in the beautiful Capital Theatre. I have straight, light-colored hair, and I'm wearing a pink jacket. I have, in the background, a large image of the Bendigo and Adelaide Bank on a screen. As per some shareholder requests last year, we will again make the transcript of this AGM available through our website as soon as we can following this meeting.
Additionally, and out of respect for those who are joining us here today and will be voting here today, we've chosen not to release early voting details. However, we will provide these details on the screen during the course of the meeting for transparency. Let me first introduce you to your board. Alongside me is Marnie Baker, our CEO and Managing Director. Marnie grew up on a farm in Cohuna. She lives on the traditional lands of the Dja Dja Wurrung and is therefore a Bendigo local. She has over 30 years' experience in the financial services industry and has been with the group since 1989. She brings to the board a strong understanding and connection to regional Australia, as well as an extensive array of banking and finance knowledge across all the areas of the bank's operations.
She's obviously also a shareholder of the bank, as are all your directors. Your incoming chair, David Foster, is from the beautiful Kabi Kabi traditional lands of the Sunshine Coast. He has been Chair of the Board Financial Risk Committee and a member of the People, Culture, and Transformation Committee. He's an experienced and highly skilled non-executive director who has a diverse portfolio across a range of ASX-listed and government organizations. David's executive career, which has spanned 25 years, primarily in the financial services organizations, including as CEO of Suncorp Bank. Next to him is Richard Deutsch, who joined the board in September 2021, and he's Chair of the Board Audit Committee and a member of the Board Financial Risk Committee. He lives on the traditional lands of the Bedegal and Gadigal peoples of the Eora Nations in Sydney.
He has an extensive experience delivering complex audit and advisory services and has been a partner at leading Australian consulting firms. Richard's previously served as CEO of Deloitte Australia and was a member of their Global Audit and Advisory Leadership team, and among other roles, he's also chair of the charity, Movember. Next to Richard is Vicki Carter, who joined the board in 2018. Vicki lives on the traditional lands of the Boon Wurrung people of the South East Kulin Nation, located in Melbourne. She's enjoyed a stellar career, primarily in financial services and more recently in technology. Vicki's held executive and senior management roles at Telstra, NAB, MLC, ING, and Prudential Insurance. She's Chair of the Board People, Culture, and Transformation Committee, and is a member of the Board Risk Committee. She's also a director of Australian Securities Exchange and IPH Limited. David Matthews is next.
He's a farmer and runs an agricultural import-export business based in the Wimmera region, the traditional lands of the Wotjobaluk, the Jaadwa, the Jadawadjali, Wergaia, and the Jupagulk nations. David has a deep understanding of Australia's agricultural sector and its importance to the economy and to our future. He's a member of the Board Audit and Financial Risk Committees, and he's also chair of our bank's Rural Advisory Committee and a member of the Community Bank National Council. He's been a strong advocate of our community bank model for many years now. In fact, this year, the bank celebrated 25 years of community banking, which actually started in his hometown of Rupanyup. Next to David is Victoria Weekes, who lives on the traditional lands of the Wangal people of the Eora Nation in Sydney.
She's currently Chair of our Board Risk Committee and a member of the Board Audit Committee. She has over 35 years' experience in financial services and has held executive roles with major Australian-listed companies and multinationals, including Westpac, Citi, and J.P. Morgan, who's now CS First Boston. Victoria is also a member of the ASIC Markets Disciplinary Panel, a treasurer of the Australian Gender Equality Council, and chair of Pinnacle Housing Partnerships. Next is Alistair Muir. He lives on the traditional lands of the Bedegal and Gadigal peoples of the Eora Nation, the custodians of the Eastern Sydney coastal area. He joined the board last year to support the bank's strong commitment to digital and technology transformation and innovative solutions for our customers. He's a member of our People, Culture, and Transformation Committee and our Board Risk Committee.
Alistair's worked with many ASX 50 and Fortune 500 companies to successfully launch digital products and ventures. He's also a director of Helia and an advisor to CSIRO on the commercialization of science and technology. Our newest director, Patricia Margaret Payn, who prefers the name Margaret, lives on the traditional lands of the Kaurna people near Adelaide. Margaret's already a member of the Board Financial Risk Committee and will take over from David Foster as chair of this committee. She's also a member of the Board Risk Committee. Her distinguished career has mainly been in finance, risk, and operational roles across financial services, including retail, institutional banking, and wealth management. Margaret has previously held positions with ANZ, Westpac, AMP, and Citigroup, and her experience will be of significant and great value to the bank if elected today.
Jim Hazel also lives on the traditional lands of the Kaurna people in Adelaide. He's shared his significant skills and his extensive experience in banking, finance, and risk management with the bank now for 13 years. He has a comprehensive understanding of regional and rural interests and has valuable insights into the challenges faced by Australia's aging population and the retirement housing sector. Jim has announced his retirement as a non-executive director, effective at the end of the meeting today. He will be sorely missed. Sitting next to Jim is Belinda Donaldson, our Company Secretary, who will be assisting with today's meeting. I'd also like to acknowledge that in attendance, we have the bank's executive members, as well as Tim Dring and Clare Sporle, who are the bank's lead audit partners from EY.
Also in attendance is Steve Hodkin, who's acting as Returning Officer for this meeting. He's from our share registry service provider, Boardroom. Our General Manager, Corporate and Public Affairs, Robert Musgrove, will assist me today by reading out questions and introducing shareholders who want to ask questions. So Robert's now going to outline some of the formalities for today's meeting. Over to you, Robert.
Thanks, Jacqui, and good morning. Today's proceedings have been structured to provide all shareholders or their proxy holders with an opportunity to participate in the business of the meeting in an orderly fashion. In the interests of all shareholders, we ask that when the time comes to put your questions, that you be courteous, fair, and respectful. Please keep your questions concise and about the matters which are relevant to the business of the meeting. Also, in the unlikely event that technical issues beyond our control arise, Jacqui will advise us on next steps. If for some reason we cannot proceed with the meeting, we will issue an ASX announcement with further information. Today's Notice of Meeting contains details of how questions may be submitted by shareholders. We welcome in-person questions from those attending, as well as written and audio questions through the online Lumi facility.
You may submit questions at any time, though if they concern a particular resolution, we'll cover those at the relevant time during the meeting. Where there are multiple questions which are the same or have a similar theme, these may be grouped into a single question to avoid repetition. Time permitting, the board will endeavor to answer as many questions as possible. Thank you to the shareholders who have submitted questions ahead of the meeting. We have carefully considered all your questions, and they will be covered as part of Jacqui or Marnie's address, or directly at the relevant section during the meeting today. With respect to today's voting procedures, I can confirm that voting of each of the proposed resolutions will be conducted by poll.
Registered holders of the bank's ordinary shares as at 7:00 P.M., Australian Eastern Daylight Time, Sunday, the 22nd of October, 2023, are eligible to participate in today's meeting and vote on all of the items of business to be considered at the meeting. Guests are not permitted to vote or ask questions. Those eligible shareholders in attendance, in person here at the Capital today, will have registered to vote at the registration desk when you entered the venue. Shareholders have been issued with a yellow voting card. If you require any assistance with voting, please see our share registry representatives from Boardroom at the registration desk outside. For those eligible shareholders attending and voting virtually, you can join the meeting and submit your vote using the information displayed on the screen now via Lumi, using any web browser on a computer, tablet, or smartphone device.
For more detailed information on voting, please refer to our AGM user guide, which is available on our website. If shareholders have questions relating to personal matters, we have a number of customer service representatives from across the bank here today who will be able to assist you after the meeting. Once Jacqui moves to the items of business requiring formal resolution, and after all questions, we will display the proxy results for each resolution, which were submitted ahead of the meeting. For our audio listeners, we will read aloud the proxy results. You will be able to vote on all resolutions as soon as voting opens. As detailed in the Notice of Meeting, voting is restricted to the number of shares each security holder holds and is also subject to any applicable voting exclusions. Thanks, Jacqui.
Thank you, Robert, and thank you for going through all those instructions. This is a hybrid meeting, so we will have people joining online, we will have people joining by telephone, and obviously, we've got people here in the theater today. So, thank you for sitting through all those instructions so we make sure everyone can participate as fully as they need to. So I'll now present my address, and then I'll hand over to Marnie to do the same. It is a pleasure to be with you in Bendigo here this morning to chair the Bendigo and Adelaide Bank 2023 Annual General Meeting. And it's great to see so many shareholders here in person at the Capital Theatre, and again, I extend a warm welcome to you and to all of those joining us virtually today.
At last year's meeting, I said we were cautiously optimistic and prudently provisioned, and we remain so. Your bank has seen a great many economic cycles in its 165-year history, and it remains well-positioned to continue meeting the expectations of our shareholders, our communities, and our customers. The economic environment we're currently in is quite volatile, and it presents both opportunities and challenges. In terms of opportunities, the good standing of the bank can be seen in the continued growth in customer numbers, as they increasingly recognize your bank as a genuine alternative to the majors. This has been undertaken during a period where careful balancing of volume growth and margin management has been key. It's also pleasing to note the continuing rise in the bank's capital levels.
They improved again over financial year 2023, with our Common Equity Tier 1 ratio rising 157 basis points to 11.25%, well above regulatory requirements and APRA's definition of unquestionably strong, and they reflect our prudent and conservative approach. In conjunction with strong profit growth in financial year 2023, this allowed us, as a board in August, to declare a full final fully franked dividend of AUD 0.32 per share, taking the full-year dividend to AUD 0.61 per share and representing a 15.1% rise on the previous year. But for some people, these are very difficult times. The legacies of COVID and natural disasters, the cross-industry-wide increase in frauds and scams, and the ongoing cost of living challenges are very real. Most of our customers remain well-provisioned, and our arrears are at historically low levels.
But for a small cohort, they need our ongoing support to help them with practical steps to adapt to the higher interest rate environment. The bank needs to persist also with its vigilance on all elements of risk, on credit quality, and on meeting evolving customer expectations. The important foundational work undertaken by our multi-year transformation program will continue to pave the way for our future growth and risk management. The bank maintains its focus on prioritizing sustainable growth for the benefit of all our stakeholders. We always carefully balance the interest of our shareholders and our customers, while considering the real impact on our people, our communities, our partners, and our broader stakeholders.
Marnie, in her speech, will talk further about the business, but I'd now like to just take the opportunity to outline some of the important community dividends your bank has delivered throughout the course of the past year. In conjunction with our Community Bank partners, the bank awarded 200 first-time students more than AUD 700,000 as part of our expanded 2023 scholarship program. This program was established 17 years ago and has now provided more than AUD 12 million in funding to more than 1,500 students across Australia. It offers life-changing opportunities for students who might otherwise miss out on further education, especially as it's targeted to those in regional and remote areas. I look forward to the contribution these students will make to the Australia they will inherit, and to the many communities they will return to.
I'm very proud of what the program has achieved and hope you are, too. In other measures undertaken this year, your board approved our ESG and our sustainability business plan and our climate and nature action plan for 2024-2026. These plans, which are detailed in our 2023 sustainability report, outline how we'll build on our performance to date and how we'll continue to be accountable for our performance going forward. The launch of the Bank's inaugural Reflect Reconciliation Action Plan was another highlight as the next step in our reconciliation journey. The Bank's executive and board participated in cultural immersion experiences hosted in the Bendigo region by the Dja Dja Wurrung and the Kaurna Peoples in the Adelaide region as part of this process. It left lasting impressions on us and built on the relationships we have and continue to build upon with traditional owners.
Now, on to some changes on the board. The process of renewal continues at a board level. As you would be aware, shareholders ratified the board's appointment of digital executive and entrepreneur, Alistair Muir, at last year's AGM, and his constructive contributions to our board discussions have been very much appreciated. We also welcome Margaret Payne as a non-executive director, effective 14th of September, 2023. As I previously mentioned, Margaret brings with her a very strong background in banking and financial services, and she will introduce herself later in the meeting when she comes up for election. We've also announced the retirement of Jim Hazel as a non-executive director, effective from the conclusion of the meeting today after more than 13 years on the board.
We thank Jim for his valuable contributions during his many years of service, and I personally want to say thank you, Jim, for your wise counsel to the board, to the management team, and particularly to myself. As you may know, this will be my final meeting as chair, with my time at the bank concluding after more than 12 years on the board and four years as chair. I consider my time with this wonderful company and its lovely people to be a highlight of my career. On a personal note, it's been a pleasure to have worked closely with your CEO and Managing Director, Marnie Baker, during a period of accelerated change for the bank, its customers, and the community. I couldn't think of anyone else I would rather have gone through COVID with, Marnie, so thank you very much.
I'm proud of what you and your team has achieved. David Foster is an existing member of the board and a highly experienced ex-banker and non-executive director, is well qualified to continue working with the executive team, and I'm very pleased he will be your new chair. I will invite David to say a few more words towards the end of this meeting. Rest assured, your bank's in good shape, and I will continue to take a keen interest in its progress. Before I conclude my address, I personally, and on behalf of the board, want to express our thanks to you, our shareholders, for your continued feedback and your loyalty. We're very lucky that we have such an engaged shareholder base, and it has been delightful to personally get to know so many of you over the years.
The board also acknowledges the many, many hours of hard work by our people that go into securing and maintaining the high levels of trust and customer satisfaction for which the bank is widely recognized. Our customer-centric approach provides both financial results and public accolades, and we will continue to deliver and build on this record for our 2.4 million customers. Thank you for your attention and for indulging me as I say goodbye. It's the people I will miss the most, and you will all be forever in my heart as I watch today purely as an interested shareholder. But I do look forward very much to having the opportunity to chat with many of you over light refreshments after the formalities of today's meetings have concluded, and I'll now invite Marnie to make her address.
We'll play a very short video while she makes her way to the lectern.
I like being able to make a difference. In my early twenties, wasn't quite sure what I wanted to do with my life, but through giving back, you know, I've got my passion in life, and the more you give back, the more you get in return. My name is Matthew Pham. I'm a board director at Community Bank Byford and Districts, on the land of the Whadjuk Noongar people. My parents came to Australia with nothing but the clothes on their back. They were Vietnamese boat refugees, and they fled after the Vietnam War. They went on a boat not knowing what was going to happen with them.
I come here, Australia, 1986, and my family believed that we better get involved in retail.
He got a loan from all his family members. He bought this local supermarket. One of my earliest memories was stacking shelves. That kind of led me down to the supermarket path. Hi, everyone, it's Matt here from Lakeside Fresh IGA. Come to the store today and grab all your bargains. So this is the new freeze-dried candy that we're trying out. Isn't this the best IGA?
Yes. Yes.
I do the marketing in my IGA stores. I think people really like that connectedness. I'm involved with Rotary in a volunteering capacity.
Matthew does think outside the box, and you need people like Matthew to come in and shake it up and make it happen. It's great.
I want to give back as much as I can to the people that have given me opportunities. In 2019, the secretary of the Community Bank, she said, "Matt, would you consider being a board director for our branch?" I said, "Yeah, why not?" What a great opportunity to give back and to make a difference in the community.... With the Community Bank, all the profits in the day is reinvested back into the community. That's what I like about it. Myself and family, and, all of us, yeah, very proud of Matthew. Yeah. For me, giving back is the best thing I've done in my life, and I wanna show that to other people in this world.
Good morning, everyone. It's a great pleasure to be here with you again in person. For the benefit of those who are vision impaired or listening via the telephone, I too am happy to provide an audio description of myself. I am of average height, pale complexion, and long, straight brown hair, and I'm wearing an olive green suit and white shirt. Firstly, Jackie, thank you for your opening remarks and for your very kind words. I, too, am very proud of our bank and what we have achieved. Bendigo and Adelaide Bank is unique. We are a bank with heart and heritage. Our connection with our customers and community, our regional roots, and our position as Australia's most trusted bank, provides us with a competitive advantage that cannot be replicated.
Our bank has never been better placed to continue delivering on our purpose of feeding into the prosperity of our customers and their communities, and supporting customers who need our help. I'd like to take the opportunity just to reflect on some of our achievements over the past 12 months before looking to the challenges and opportunities that lie ahead of us. Over the course of the last year, we made significant progress on our strategic imperatives. We continued to reduce complexity in our operations, we invested further in our capabilities, and we told our story in more ways than ever before. We continued to deliver on our strategy and to strengthen our focus on improving financial returns and generating sustainable growth.
The bank reported record cash earnings for the full year of AUD 576.9 million, and further improvements across other key financial metrics, such as our return on equity, which rose 90 basis points to 8.62%. Our cash earnings per share, which rose 13.7% to AUD 1.021, and our cost-to-income ratio, which improved by 420 basis points to 54.9%. Also strategically, the bank continued to deliver on its transformation program, launching new digital product offerings, including Term Deposits Online, reducing the number of core banking systems from 7 to 4, and reducing the number of IT applications by 90, as well as moving one-third of those applications to the cloud.
These metrics demonstrate our continued momentum and the progress we are making on our objectives while retaining our market-leading trust and customer advocacy scores. Jackie touched on the current economic challenges, and I'd like to talk about what we've been doing at the bank to support our customers in an environment of rising interest rates and cost of living pressures. As Jackie said, the vast majority of our borrowers are well-positioned. However, a small number do and will require our assistance. We know some of our customers are doing it tough, which is why it is important we stay close to them. Our primary objective is to keep our customers in their homes. This approach has contributed to our market-leading customer advocacy scores and has ensured the historical loss rates on our mortgage portfolio are among the lowest in the industry.
We will continue to support customers as and when they need us. The bank offers all of our customers a free home loan health check to ensure their current loan suits their needs, and we are contacting customers who are coming off fixed rate home loans to ensure they are fully informed about the options available to them, such as using an offset account to reduce repayments. The other topic of critical importance that the bank and our customers are facing is the rising volume of scam and fraud activity. It is true to say that advances in technology have brought many improvements to our lives, and the digital services that facilitate speedy payments and round-the-clock availability are among them. But the downside to these digital conveniences is the rise in cybercrime.
I've heard many upsetting stories of customers who have fallen victim to this organized and often sophisticated criminal activity, and I want you to know that we are working hard to reduce instances of scams and fraud. In the past financial year of 2023, we stopped AUD 38.6 million in fraudulent transactions. And as part of our ongoing and consistent focus on protecting our customers, the bank has tightened transaction rules, removed hyperlinks from our SMS messages, and we've doubled the size of our financial crimes team.... We continue to work hard to educate our customers about how to stay safe online and proactively detect and prevent the unauthorized use of customer accounts, including face-to-face education sessions at 430 locations across Australia.
And I do encourage customers and local community groups to go and inquire about those banking safely online sessions at your local Bendigo Bank branch. Importantly, and in addition to what we are doing in our bank, we are advocating strongly for a whole of ecosystem approach to combating scams and fraud, and continue to remind customers of the important role they play in keeping their information secure. As Jacqui mentioned, this year, our unique Community Bank model celebrated its 25th anniversary, and it has now directed AUD 320 million in profits back into these local communities since its inception. Just last month, we held the Community Bank National Conference here in Bendigo, the first conference in person in five years and since the pandemic.
It was fantastic to see so many Community Bank directors in one place to talk about what makes our Community Bank model so special and how we will ensure its success for the future. I'm really proud of what we have achieved over the past 25 years, and I'm reminded once again of the important role strong banks play in the community, particularly in regional Australia. Earlier, I spoke of our achievements in digital over the past 12 months with the launch of online term deposits, which have contributed to our overall customer deposit growth. As of the second half of the 2023 financial year, 12% of the bank's home loan settlements are now fulfilled through digital channels. We are excited about the possibilities our investments in digital products have created for us.
We understand, however, that while we house workloads in the cloud, we ourselves don't live in the cloud. We live in physical communities, and our physical network is very important to us, and we value the personalized interactions we have with our customers every day. Looking ahead, the opportunities for our bank have never been clearer. Our strengthened focus on delivering sustainable growth and returns is yielding benefits and will continue to do so. Customer preferences are changing, and we need to be responsive. We expect customer interest in our digital mortgage products to continue to grow as customers embrace their convenience and utility, and we will continue to work hard on our transformation agenda and to realize the benefits of further reducing complexity in our operations.
We expect the deposit market to remain very competitive as banks look to build a solid funding base in preparation for the repayment of the Reserve Bank Term Funding Facility. We see significant latent opportunity in business and agribusiness, particularly given our deep regional roots and community presence. We successfully delivered on what we promised in the financial year 2023, and we are now working towards delivering on our goals for this financial year, 2024. We will continue to manage our costs diligently and focus on strengthening the returns we derive from our investments, so we can continue to future-proof our business and deliver returns to you, our shareholders. As Jacqui mentioned, today is her last day as chair and director of Bendigo and Adelaide Bank. Jacqui has been a beacon of strength and integrity for this organization over the past 12 years.
In her role as chair, she has helped steer our bank through challenging periods, such as the aftermath of the Banking Royal Commission and the recent pandemic. Through it all, she has been a calm and steady influence, providing a wealth of knowledge, support, and stability for myself and my executive team. I'd like to personally thank Jacqui for her support, wise counsel, and thoughtful stewardship during a period of accelerated change for the bank, our customers, and the community. Jacqui, you have given so much to our bank over the past 12 years, and you leave an enduring legacy, and we all wish you well for your next chapter... We are very fortunate to have a strong successor in David Foster, and I look forward to working closely with David as we continue to deliver on our vision to be Australia's bank of choice.
In closing, I would like to sincerely thank our 2.4 million customers for your advocacy and the opportunities you provide us to do business with you. Also, I'd like to thank my team, our almost 8,000 people at the bank, who work hard every day to deliver good outcomes for our customers. I'd like to thank our partners and suppliers for the support, capability, and knowledge you provide our business. And my thanks go to the board for your ongoing guidance and support. And last but not least, thank you to you, our dedicated shareholders, for providing us with your strong support. I thank you for your time today, and I look forward to speaking with many of you at the conclusion of today's meeting. Thank you.
Thank you, Marnie. I'll now turn to the formal business of the meeting. The first item relates to the bank's financials report, financial report, directors' report, and independent auditors' report for the financial year ended 30 June, 2023. The 2023 Annual Financial Report was made available to shareholders in September. Our external auditors, Ernst & Young, issued an unqualified opinion on the financial report. I note there's no requirement for shareholders to vote on this item of business, and ahead of this meeting, shareholders were provided the opportunities to submit written questions to the auditor about the content of the auditor's report and the conduct of the audit and the Annual Financial Report.
The auditor has advised that none of the shareholder questions submitted in advance were related to the auditor's report or the conduct of the Annual Financial Report, so we've included these questions with the rest of those submitted in advance, which I will answer as we go through the meeting. I'll now take any general questions on the reports, other general matters, or if there are any questions to the auditors. Given this is a hybrid meeting, I'll rotate between shareholder questions submitted in advance, questions from those people here in the auditorium, in the Capital Theatre, and any questions that are coming in online. Robert, perhaps we could begin with some of the most common questions that have been submitted in advance.
Thank you, Jackie. I'll preface my announcement of these questions by saying there were a number of questions from shareholders about personal or share registry matters. In these cases, we've contacted the shareholder directly to provide assistance and won't be putting those questions to today's meeting. Furthermore, in relation to the most common questions that have been submitted in advance, some of these questions have been adjusted slightly for reading ease and similar questions grouped for brevity. The first question is from Patricia West, who asks: Is Bendigo and Adelaide Bank heading down the direction of no cash like some other banks? I personally refuse to buy from a venue that posts card only, no cash. We received eight similar questions on the use of cash in branches from shareholders, including Judy Rowe, William Osmond, Timothy Clifton, Steven Cressy, Barry Johns, and Glenn and Julianne Rigby.
The general sentiment from those shareholders can be best encapsulated by the following question: Will the bank follow the lead of others and introduce cashless branches?
Thank you, and I can see, by the number of questions we've had come in in advance on this, that this is a really big issue for many customers. So let me, firstly thank you all for your questions, and just start by alleviating any fears here today by saying that Bendigo Bank has no plans to phase out cash across our branches. So you can be assured of that. Having said this, we do note, as the original question stated, that some businesses are going no cash. That's, of course, up to them to do, but we will keep a close and evolving watch on this and on customers' reaction to that as we go forward. Probably worth saying, and Marnie mentioned that we have Australia's fourth largest branch network.
So we are very focused on those genuine and those personal interactions that take place in there. They're, they're just as important to us as they are to our customers. So hopefully, I've alleviated the concerns of those shareholders about cash. Robert, next question?
Certainly. The next question comes from Janice Abbott, who asks: If, as we are told, there are more secure ways of banking, why are there so many scams? We received five more questions on this topic from shareholders, including Timothy Clifton, Steven Cressy, and Megan McMeekin. The general sentiment from these shareholders can be best encapsulated by the following question: What is the bank doing about the increase in fraud and scam activity?
Yeah, look, thank you again, and Marnie did address this in her speech, and she addressed it in her speech because it is a, an, a very important part of what our customers are facing today and, and generally what people are facing in Australia. It's affecting many of our customers, and it's affecting the industry more broadly. And as she mentioned, for normal people, we don't normally get involved in organized criminal activity, but now it's here around us every day, whether that's in energy, in telco or in banking. So, just in terms of specific questions, we obviously don't talk for privacy reasons about specific customers, so I won't comment on those, and I'm not sure anyone expected that.
But, to sort of generally comment, the bank, wherever we are at fault, will reimburse customers. So I can say that, importantly and genuinely, because that's important. Marnie pointed out in her opening address that we take cyber security very seriously, and we use a combination of standard industry practices to protect customers and to safeguard our own systems. I'll repeat a little bit of what she said because it is, this is a pretty important topic for everyone. We provide customers with very regular alerts about current scams targeting customers, and we maintain web pages, and we have general tips. I know we get feedback sometimes that we're bombarding customers with information about how to keep their details safe, but it really is very important.
We've recently announced blocks on high-risk cryptocurrency transactions because these are a very prevalent part to any scams and fraud activities, and we've tightened transaction rules from earlier this year. What that means is we've put a bit of friction into the system or a little bit of delay there. There is a chance for the bank to step in, if something looks unusual or if customers contact us. We've launched new digital literacy education programs, and we've actually launched ones that are being run in our branches by our people, because this sort of face-to-face education, I think, helps customers learn better how to safely navigate digital banking. Marnie mentioned we've removed all SMS links. We've doubled the size of our fraud response team and prevention team, so that's been really important.
Know that we will never ask you to transfer money to unknown sources. We'll never ask you to download software or log in via a link that's sent via email or SMS. If you're speaking to someone who says they're from Bendigo Bank and you're in any way unsure, do what I do when whether it's a bank or a telco or energy or any other company, I say, "Thanks for the call. I'll call you back." I hang up, and I look for the number directly, and I call them back. Our number is 1300 236 344. Important number that you can all put in your phone books if you like, but otherwise, look it up and just call them back.
Because cyber fraud is, it's complex, it's growing, and it's just such an ongoing challenge that every day Australians shouldn't be in the middle of organized criminal activities. But just the way the world is now, that's unfortunately what's happening. So we will continue to work as a bank and put in a amazing effort, and I really thank all of our people who work in this area. But we'll continue also to cooperate with government, with regulators, with industry, and of course, with consumers, to combat this organized criminal activity. Our security staff remain very vigilant. Obviously, they work with the Australian cybersecurity agencies, intelligence agencies, technology partners, to make sure we can detect any malicious and abnormal behavior.
I've spent a bit of time on that one, but I think it is an important one, given the world we live in these days. Robert, perhaps onto the next question.
Your next question comes from Mary Boyce, who asks: Is Bendigo and Adelaide Bank prepared to commit to retaining branch offices where possible and providing services to customers that the four pillars banks neglect? We also received five similar questions from shareholders, including William Hort, Philippa Fletcher, Denise Carter, and Raymond Fitzgerald. The general sentiment from these shareholders can be best encapsulated by the following question: What are the bank's plans for its regional branch network, particularly in regional Australia?
Look, thank you again to our many engaged shareholders who've submitted questions on this one. I'm not surprised. It is a part of our DNA, so I'm really pleased that we get a question on this every year, so I'm sure that will continue. Just to reiterate a few things. So I've talked about we do have Australia's fourth largest branch network. Perhaps another more interesting way to look at it is we operate more branches per customer than any of the majors, because our physical network is very important to us and important to our strategy, and Marnie covered that in her speech as well.
So while we don't, I guess, know exactly what the optimal number of branches is, we do know that more customers are choosing to do their banking online and via other means. So we have to carefully balance, on behalf of our shareholders, our ongoing investment in both our physical and our digital infrastructure. So we have to carefully consider when and if we get to the point of closing any branch or agency, and that's usually only ever a very last resort. In circumstances where we do that, and sometimes we have to, I acknowledge absolutely this creates some difficulty for, for some customers and, and perhaps a lot of difficulty for some customers. And we work with our customers to minimize that inconvenience and to provide them with alternatives as, as much as we can.
So we do still have more than just over 50% of our branches are in regional and rural and located in remote areas, and close to 50% of our employees live in these regions, so they understand. We have a terrific understanding within the bank of what it means to be living in the, in these regions. So our branch network is critical to us. It helps achieve our purpose, and it remains a very important part of our strategy. You might have heard of a few things that have been going on this year. We've had a Senate committee inquiry into branch closures in regional areas, which we participated in, and we're also working with the recommendations of the Regional Banking Task Force, which we were represented on as well.
So we know we need to be on your phone, on your computer. We know we need to be physically there, somewhere close to you in a geographical region, and we know we need to be available by a broker. So we'll continue to try to do all of that and to try and balance that as best we can. We're doing it all today, and we'll continue to do that while balancing the best use of shareholders' funds. Robert, we might just go on to, having taken a few pre-submitted questions, we might go on to any questions here in the audience, and I will sort of rotate around between the audience, online questions, and pre-submitted questions to make sure everyone gets a chance. So in-person questions.
Jacqui, our first in-person question is from Eric Pascoe.
Good morning, Madam Chair. I'm a proxy holder representing Australian Shareholders' Association. We hold 2.27 million proxy votes and representing about 305 shareholders. Jacqueline, I'd like to begin by thanking you for the way you've engaged with the Australian Shareholders' Association in your time as chair. We think your personal qualities that you've brought to your role are just exceptional, and we would wish you very well for the future. Thank you.
Thank you.
Ms. Hey, the Bendigo and Adelaide Bank is sitting on a very large franking credit balance, some AUD 683 million worth, which is of no value to the company. That is, it's, it isn't an asset, it's just a figure sitting in your books. However, franking credits can be very beneficial in the hands of shareholders. Is the bank considering, or will the bank consider innovative ways to distribute the large franking credit balance to shareholders? Such action would be very supportive of the share price, benefiting shareholders, of course, but also benefiting the bank.
Thank you very much, Eric. Thank you for your kind words. In terms of the franking credits, yes, we do have a large balance there. It's a good thing to have, obviously, 'cause we can feel very comfortable that we can continue to fully frank dividends going forward. In terms of innovatively getting them off our balance sheet, obviously within the bounds of the legals, we will be looking at every possibility that we can do because we're aware that they're of value to shareholders. They're of value to shareholders to give you some confidence that fully franked shares are something you can expect from Bendigo going forward.
And they're something that we are conscious are sitting on our balance sheet and we'll do the best that we can do to get as many of them out to shareholders as possible. But, unfortunately, we can't just kind of give them away. I know you've raised this issue before, so it's and I know our CFO, Andrew Morgan, might have talked to you at that time, if I remember who answered the question. So it is on our radar. It is something we're thinking about and is something we will continue to give our intellectual thought to on how we can use those, utilize those for the best use of all shareholders.
Jacqui, our next question is from Craig Caulfield.
Oh, good. Thank you. Good morning, Chairman, good morning, directors, and good morning to all the shareholders. I would like to wish you well, Ms. Hey, with your future, and thank you for your work. And I'd also like to welcome David Foster in. He's got a very extensive experience and particularly, previously CEO of Suncorp. I did want to talk a little bit about the Suncorp ANZ and ask some questions about the merger there. I note that the ACCC said, no, the regulator said no to the merger, and ANZ is challenging the regulator. And the regulator in their notes also mentioned, talked favorably about Bendigo. And I've seen in the media that Bendigo was interested in a merger. Are you still interested in a merger?
Would you still be prepared to do that now, given that there is this, tribunal hearing coming up towards the end of the year?
Thank you very much for your question. As we said, I think it might have been this meeting last year, we normally don't comment on merger and acquisition activities that are on foot, but given that one was so public, then we did talk last year about we had an interest in talking to Suncorp. We weren't able to talk to them, so therefore, it was hard to pursue that interest to a point where we could really understand whether it was good for the shareholders of Bendigo and Adelaide Bank. I acknowledge that ANZ and Suncorp have decided to continue to appeal the ACCC's outcome, and that process is in place.
So I think we just need to let that play out now and, see where that lands, and we'll, in the meantime, be focusing as much as ever on our own organic strategy, which is something, where there's always more to do. Marnie talked about many of the things we, we are doing, always more to do, and for the moment, that will have to be our, our focus.
Just to follow up on that, in this tribunal process, are you making a contribution? Are you contributing to that tribunal process, or is that a closed process?
We've contributed all the way along, anytime the ACCC has asked us, and we'll continue to do that.
Are you allowed to contribute to the tribunal coming up, which is different to the ACCC?
The tribunal, if they ask us, we'll contribute to them. All of our documentation has been available. Marnie, there must be hundreds and hundreds, if not thousands, of pages of documents that they've asked for, and they have it all available to them to consider as part of the process... Is there any more, Marnie, to add there?
No, no. There's a process that's underway, and we just need to let that process take its course.
But thank you for your question. I should have said, just to make sure that we get through, Colin did mention, try to not give you the second question. We are trying to just cycle people through. By all means, come back again, but let's try to do one unique question at a time, and then let somebody else have a go. But thank you.
Jacqui, our next question is from Rita Mazalevskis.
Good morning, Chair and board. Nice to be back here in person in Bendigo again. I just want to go back before we get away from this too much, just regarding fraud risk, given that it's accountability under the board. Under the Annual Report, where it states business uncertainties and fraud risk, it says, "The group is exposed to the risk of fraud, both internal and external, including fraudulent applications for loans. The group also runs a risk that staff, contractors, and external service provider misconduct could occur. For instance, fraudulent conduct can also arise from external parties seeking to access the group's systems or customer accounts.
All actual or alleged fraud is investigated under the authority of the group's financial crimes unit." Now, just in regards to, my time attending the AGM since 2019, when, the chairman was Robert Johanson, who I know is in the room, so hello to him, and which has been raised with the board since, including yourself, Chair, and the CEO and other executives. The bank has been advised of fraudulent lending, which has not been dealt with by Bendigo's own financial crime unit and remains outstanding, albeit customers have provided, evidence directly to the bank.
So my question is: why isn't the bank's internal dispute resolution process, as required by ASIC under RG 271, not fit for purpose for such circumstances, where the evidence has been provided and the bank seeks to extend investigations externally instead of, not spending shareholder money and, solving it in-house because they have all the evidence they need?
So thank you for your question. There was quite a lot in that, so I'll, I'll see if I address it all. The first part was, I think, referencing some part of our annual report, where we cover all of the risks. And obviously, in writing that, we have to think of every possible risk we can think of and make sure we're fully transparent about them. So in reading it out, I don't want you to think we think all those risks are existing there today. We just have to be aware of all of them and make sure we're protecting for all of them. So that's the first part. The second part is around our internal dispute resolution, and if a particular customer has a dispute in terms of fraud or any other reason.
So our internal dispute resolution works within the bank according to its processes, and that will start with our first line if it can't. In other words, the customer-facing staff. If it can't be resolved there, it will certainly go on to our customer advocate office, which is an independent group internally, and we will aim to resolve it internally wherever we can, and that will be based on the evidence that we can see. There is always an opportunity for customers, if they're not happy with that outcome, to go externally, and AFCA is usually the next. Australian Financial Complaints Authority is the next place to go. And if customers wish to go there, of course, we'll participate fully in AFCA. So I think our internal dispute resolution process does work.
Doesn't always get the answer that every customer wants, and there therefore needs to be external avenues for them to follow that up. Thank you for your question. Next question, Colin?
Jacqui, the next question is from Rex McKenzie.
Madam Chair, my first question is about understanding banking for a customer, and it's age-related somewhat. I'm pleased to see that the proportion of younger customers of the bank is increasing, but some of the older customers are still here. So my first question is very simple: What's a hyperlink?
Yep.
Uh, and the-
A really good question. Keep going. Yep.
The second question regards Queensland and the bank's expansion in Queensland, and the recognition of quick- by Queenslanders of the Bendigo Bank. Are we expanding in Queensland by natural growth? It's an area of very high economic activity. Are we getting our fair share?
Thank you very much for the question. And the first question of what's a hyperlink is a unbelievably good question, because when you deal with this every day, you make an assumption that everyone knows, and it's absolutely not the case that everyone knows. So thank you for asking that, 'cause I expect you've asked it on behalf of many other people that have the same question. So a hyperlink is any time you get a SMS, so on your phone, a text SMS from anyone, or you get an email, and in that email is, like, a web address that's often underlined, and it says, "Click here." And the clicking here is that's called the hyperlink, and when you click here, you should go to an approved place, being the Bendigo Bank, although we don't send them anymore.
You should go to an approved place, but that's where the scammers and the fraudsters come in, is they kind of have a link that might look, at first glance, genuine, but you click it, and you go who knows where. So the reason why the Bendigo Bank's not putting in any hyperlinks or any other links for you to click on now is we just need you to distrust anything that has a underline on it and says, "Click here." So hopefully that gives you a bit more flavor, and thank you for asking that question. It's a really good one. The second question about Queensland, I'll get David to, to make a comment in a minute. But in terms of our growth, if you go back in history with Bendigo and Adelaide Bank, we started here in Bendigo, and we expanded through Victoria.
We're very strong with the Adelaide Bank acquisition in South Australia. We've got good coverage in West Australia and Tasmania, and we've been having good growth in both New South Wales and Queensland. So we are growing everywhere, and we are a nationwide bank. Queensland itself is a terrific opportunity. David spent many years living there and working there, so anything more you'd like to add on the great opportunity we have in Queensland?
Probably only a couple of things. You're absolutely right. The growth in the economy, internal population growth, and so forth, is very strong in Queensland. It's fortunately very consistent with Bendigo's strategy. A large proportion of the population is based in regional areas, not necessarily just in the CBD of or Brisbane centrally. And certainly, there's good representation, a bit like our broader footprint in those regional areas, and good growth. And certainly from being a local competitor at one point, albeit a while ago in Queensland, Bendigo were always a strong competitor for particular customers, particularly in the regional areas.
In fact, I met one of the managers who was the Community Bank from Paradise Point branch, which is at the Gold Coast, which is the branch that I used to be branch manager at, at Westpac many moons ago, which is no longer there. But the Bendigo branch is actually in my old office at the Gold Coast. So that was quite interesting. But a good competitor and certainly plenty of opportunity to continue to grow.
I think, Jacqui, if it's all right, I'll just add, too, through our acquisition of First Australian Building Society back in 2001, too, was when we got a real footprint into Queensland. And at that particular point in time, that brought on another 60 branches onto our network, and we're still sitting roughly about that level now within the network.
Thank you for your question, on behalf of the bank and all Queenslanders.
Thank you.
We might take one more question, Colin, and then I'll see if there are any coming in online.
Jacqui, the next question is from Grant Goodwin.
Thank you, Madam Chair. More than anything, it's probably an operational question, and if you could, I've got a couple of questions, but they're only short ones.
Of course, sir.
We've become aware of a dispute, which in our reasonable opinion, this is 16.8 of your terms and conditions. How would you formulate a reasonable opinion?
I might ask Marnie to cover that, or maybe we talk to you offline, but clearly, we have to be reasonable. So that's-
Mm-hmm.
What's the definition of reasonable?
Indeed.
It's a hard one for me to answer 'cause it depends on the unique circumstances of the account of the contention or of what's required. But reasonable would have a legal meaning, which our lawyers would be able to talk to you about. But more importantly, I think for Bendigo Bank, it would have a practical reasonable meaning of being reasonable, of listening, and of working through with the customer whatever dispute there is. So it's a little hard to answer it specifically, and I don't want to answer it legally, 'cause that's usually not the first way we approach it. We approach it by practically what is the issue with the customer, and how do we work through to a resolution? Marnie, does that cover it or-
Yeah.
Yeah. I take on board what you're saying, and of course, it'd be fair to say the reasonable opinion should be formulated by talking to all parties. It, that-
Correct.
I think would be fair, wouldn't it, Chair?
Yeah.
Now, the second question is, if a customer, which of course was myself, and you write a letter to the CEO, would it be fair to say you ought to get a reply?
I think if you write a letter to the CEO, I would have thought you'd get some sort of reply.
Right.
So you're probably about to tell me that you didn't get a reply.
Absolutely.
Yeah. Okay.
Absolutely.
In which case, I apologize.
Not much good of that at this point in time.
I will apologize if I haven't replied, because I do, if I can't reply in person, I will get someone from my team to make sure that they do make contact with every single correspondence that I receive. So I do apologize if you haven't received a reply at all, and I'm very happy to have a conversation at the end of this meeting.
All right.
We'll look into what's happened there.
We do have some customer services representatives here who are here specifically to take on any issues that customers have, so happy to introduce you to those.
Indeed, I-
because you deserve a reply.
I appreciate that. Of course, I've got a quite a list here that would be, we'd be here all day if we went through it.
Maybe we should introduce you to them, and then they can sit down with you afterwards.
Indeed. Indeed so, Madam Chair. Further to that, and the last question is: if a email was sent to an executive director-
... would it be, is it proper for him to answer to that email or once again reject it?
If it's sent to a director, as in myself or any of the other directors-
Mm-hmm.
We'll normally forward it on to Marnie's office to make sure there's a reply.
Right.
'Cause while we're responsible for the governance of the organization, we usually don't get involved in individual customer issues.
Mm.
We make sure that management will give a response. So again, apologies you didn't get one.
Mm.
I would encourage, too, because sometimes we do have issues with emails, as everyone knows. If an email is actually typed in incorrectly or is not quite right, it won't actually get to anyone. So I do encourage people to use the emails that are actually on our website, which you can make sure will actually get to the organization and will get to the intended person within the organization.
Mm. Mm. Thank you, Madam Chair.
Thank you.
Thank you.
Robert, I might just go back to you to check whether any online questions have come through to give those people a quick chance, and then I'll cycle back through pre-submitted and in-person again.
Thanks, Jacqui. At this stage, there are no further written or audio questions for this part of the meeting.
Okay, then we might go to a couple of... I see someone standing there, so let's do one more in person, and then I'll go to some of the pre-submitted ones again.
Jacqui, we have a question from Frederick Cornelius.
Oh, good morning.
Good morning.
Yes. My, my thing is that Bendigo Bank has got seems to be pushing us to do a lot of banking online. It gets very onerous for me at my age to go into net banking, and as Marnie has touched on the fact that you're increasing your security, you are aware of the scams that are coming on, and on, and on. And this is making it very onerous for people like me, because I'm not very comfortable doing internet banking. And besides, while I'm not dumb, I still find it very onerous using smartphones and all this other stuff. And the more you go on, the more passwords you've got to remember. I mean, we're getting to a stage where we're going to need passwords to go to the toilet, the way things are going on.
Yes.
But to get back to that, now, the other thing I have is that you are forcing us to go online, and you're closing down branches. Now, some of the branches... Now, I live in Essendon, and I've come all the way up from there. I had two branches that I had access to through public transport, because after a while, when we get a certain age to not fault our own, we lose the use of our own vehicles. We are condemned to public transport. You've closed the two branches that were easily accessible through public transport, that's Moonee Ponds and Niddrie, and you left two branches open that are relatively difficult to get to with public transport, and it's making it very onerous for people like me.
So when you do these things, can you factor in the fact that there are people of my age? We may not be around long enough, but for the little while we're around enough, give us a go, because we're happy to support you, and we enjoy the facilities you give us.
Thank you. Thank you very much, Frederick, and I recognize all of those things. Online banking and smartphone banking, it's nothing to do with intelligence there. It's the kids are brought up doing this, and for people my age and your age, we're learning it later in life, and it can be very difficult. So that's why we still have a very strong focus on our physical branch network, as I covered. I understand that sometimes it gets to where certain individuals and important customers are not able to get to a branch as easily as they once could, and I apologize for that. I think we take many things into account when we do decide to close a branch, and it's never an easy decision for us.
We do think about public transport, but I guess we don't really know where everyone lives or where they're coming from. So if we've made it harder for you, I really apologize. But again, really happy to pair you up with somebody after the meeting to see if there's a better option for you. So very happy to do that, and let's see, 'cause we appreciate your support. We appreciate the fact that you've obviously supported us for some time, and we really want to do the best by you. So let's see how we can help you after the meeting. Thank you. Robert, I might just go back to any other pre-submitted questions. I know lots did come in, so let's keep going with those, and then I'll come back, Colin, to some in-person ones.
Certainly, Jacqui. Your next question comes from Heather Spurling, who asks: "The share price does not tend to increase as other bank share prices do. Why not? And what is being done to rectify this?" We also received four other questions on this topic from shareholders, including William Hort, Terence Stackpoole, Martin Holden, and Martin Short. The general sentiment from these shareholders can be best encapsulated by the following question: "What is the bank's strategy to drive improvement in the share price?
Thank you, and totally important question for shareholders, so I get why this one has come in. And thank you for it. So as both I think Marnie and I spoke about in our opening statements, our overarching strategy remains in place. So we're doing what we must do to deliver our key strategic imperatives, to get our transformation going, and to invest in capabilities across the organization, particularly in digital, data, and risk, as we've talked about. So we need to continue to build the bank of the future, while doing and servicing customers today. And we've got to be able to continue to strengthen our position, as a genuine and as a compelling alternative to some of the larger incumbents....
So while we do all that, we're doing that so that we can continue to maintain our momentum in returns for shareholders, because you give us the capital to manage the business. And we'll do that by managing our costs by generating sustainable returns on our assets, and by hopefully continuing to attract customers using our very unique proposition. So we do attract customers. We are continuing to grow, and our disciplined approach to that growth is driving profitable growth in the markets in which we do compete and where we are targeting. And so we're four years now into a strategy Marnie first presented in 2019, and I think there's been some really good outcomes in terms of improved returns due to that transformation agenda.
So Marnie did cover a few of these, but let me cover them again. I think or maybe you didn't cover them since July 2019, which is when we put the strategy in place. So I think sometimes it's worth thinking back a few years. So in July 2019 to now, we've improved our share earnings per share have come from AUD 0.85 to AUD 1.021. Our return on equity has moved from 7.55% to 8.62%. And our balance sheet, which is really important for any bank, remains strong, and our CET1 earnings have moved from 8.92% to 11.25%. So that's really. They're all very key, important factors.
The other key important factor for shareholders, of course, is the share price, and while we don't get to control that, we only get to control what we do, that hopefully then benefits on that. Over the last 12 months to the start of October, which is the last time I looked at the comparison, Bendigo and Adelaide Bank's share price had outperformed all of our peers. So we're up 7.6%, and that's, I think, really important. A couple of the majors were up a couple of percent, and the other majors and BOQ had been down over the last 12 months. So it does vary. As I say, we don't control share price. We control our strategy, our organic growth, and the activities that we do.
While we're pleased with our progress, I don't want you, for a minute, to think there's not always more that we need to do, will do, and should do. But thank you again for that question, as I know share price is absolutely key to all investors. Robert, another... Any more pre-submitted questions? I think there was a few.
There are certainly, Jacqui. Your next question comes from shareholder Lynette Baxendale, who asks: "Why did BEN Board feel the need to enter public debate for the Voice? Companies I invest in, I feel, should adhere to their business and not offer opinions on social political issues." We received four other questions about the Voice from shareholders, including Lyle Geyer, Shirley Knight, Karen Annette Fox, and Ronald Cutler.
Look, thank you everyone for your questions on this one, and I know it's a topical one. We don't participate in political issues, but we will participate in policy issues. We're a ASX 100 company whose purpose is to feed into the prosperity of communities across the country, and that's been something that has been key and genuine to us for as many years as I've been involved and perhaps as many years as the bank has existed. So we will, from time to time, where we think it's appropriate and where it is genuinely aligned to our purpose, take a position on issues that are of national importance, in particular, as I say, where it's core to the purpose of our organization.
These decisions aren't made lightly, and we, of course, make sure appropriate governance is in place to guide that decision-making. We totally note and we respect the final outcome of the result of the referendum, but we started with a confirmed commitment to our Reflect Reconciliation Action Plan. The Reflect Reconciliation Action Plan is about listening, and it's about learning, and it's about making your own opinions and educating yourself. It's available on our website if you'd like to look at it, but that guided our approach to reconciliation about the bank, and we focus very much on listening and learning.
We didn't contribute financially to either side of the debate, but what we did do is to make sure that we had resources available to educate our own people more fully on Indigenous issues, and so they could be fully informed in making whatever decision they wanted to make, from a, from a perspective of their voting intentions. So we'll continue to focus on implementation of our RAP going forward, and we thank you very much for that question. Next question, Robert, and then I'll come back to in-person.
Certainly, Jacqui. Your next question is from Luigi Pucillo, shareholder, who asks: "Why are you phasing out chequebooks where there are a lot of elderly people still using and require them? That is, a tradie comes, get the chequebook out and pay them. No internet banking, and job done, everybody happy." We received two other questions about the phasing out of cheques from shareholders, Noah McDonald, Peter McLaughlin, Patricia Ann Sera, and Norma McLaughlin, that can be best summarized by the following question: "What is the bank's plan for the phasing out of cheques, and how will you support customers who rely on them?
Look, thank you for these questions. I gave you a very, clear reassurance on cash. I can't quite do that on cheques, because as you may know, the popularity of the cheque system has been in significant decline for a number of years. And the reason I can't give you a long-term assurance on cheques is the federal government has actually announced the check system in Australia will wind down no later than 2030. So that's something they've had announced, and as a bank, and we have a large number of customers in regional and rural areas who rely on cheques. So we will work closely with the government and the Australian Banking Association and, of course, with our customers as we work out the transition of this over the coming years.
So given it is a federal government announcement, what I can say and reassure you today is that we're giving a lot of thought about how we best do this, and particularly how we support elderly and vulnerable customers and customers in regional, rural, and remote areas who have and can have very limited internet access, about what help can we give them as we transition out of this. And as you know, Marnie has a rural background, and she knows how much certain customer groups rely on cheques, as do many of our people working in the bank. So rest assured, we'll work as hard as we can to make this transition as smooth as it can be. We might now pause on pre-submitted questions and go back to the floor. So, Colin?
Jacqui, our next question from the floor is from Milton Wylde.
Jacqui, sorry to see you go, and thank you for the work you've put in to date. We wish you well in your next endeavor at Qantas. My question, I guess, is directed to the entire board, but particularly to Mr. Foster, who's taking your role. The decision of the board to work towards reconciliation is fantastic, but I am concerned that you're wanting to reconcile with my fellow Indigenous people, but you're not willing to reconcile with your own customers. That said, going back to, I guess, 2018, Mr. Johanson made a commitment in an interview with the ABC that he would endeavor to look into my situation with Bendigo Bank, and of course, the following year, he resigned, and nothing has happened.
In December 2019, I met with you, Marnie Baker, and our then Assistant Treasurer, and a commitment was made by you and Marnie in the presence of the Treasurer, and that meeting was recorded. It's now taken four years, and nothing has happened because Mr. Will Conlan has decided to delay-
Milton, I ask you to talk about the bank, not about individuals.
The bank has decided to delay and again frustrate that process, and nothing has again happened. My question is to Mr. Foster. You're now stepping in to a role to replace Jacqui. You're going to take responsibility for the commitments that she and Marnie has, have made in the past. How do you endeavor to actually resolve those issues?
So thank you, thank you for your question. I will take that as Chair of the meeting. So I'm not going to talk about your individual case, but you are, as you've mentioned, well engaged with our senior executives and myself, and we have worked through, as best we can, the issues that we have with you. So more than that, I can't say anymore, 'cause I don't want to talk about your individual case, and I won't do that. More than happy that you engage with us again at the end of this meeting. But Milton, we've had those discussions, and as I discussed earlier, we have our internal dispute resolution, we have our external dispute resolution, and in working through those, we'll work through those as best we can.
We understand that it doesn't always end up in a position where everyone's happy. But I'm not going to talk about your individual case now.
I appreciate that, but I don't call no response.
No, I have to disagree with you that there's no response, and we'll leave it at that. I just have to disagree with you. On behalf of shareholders, there has been responses. I'm very aware that you're not happy with the outcome, and let's leave it at that.
There have been no responses at all.
Milton, that's the end of it. Thank you, from an individual case. Colin, is there any more questions?
Did you have a question?
Yeah.
Another question from Craig Caulfield. Jacqui?
Oh, thank you, Chair. I just wanted to talk about scams a little bit. That's something that's come up regularly. It's something that everyone's concerned with. And you'd be aware that you know, I'm a founder of Bank Warriors. I'm here with two of my colleagues, Elwyn Klappe and Rita Mazalevskis, and I'm also an advisor to Bank Reform Now. We have, you know, more than 15,000 members and followers, so I'm not just speaking for myself, but the other shareholders in the room and the ones that have been talking too, reiterate the same. I bank with ANZ. I made a transfer online one month ago, and the A...
On my mobile phone, and on the ANZ app, it said, "We do not match account names to account numbers, and should anything go wrong, the liability is with you." I've been to the Commonwealth Bank annual general meeting, and they have protections in this area, and I understand Westpac and NAB do. Does Bendigo match account names and numbers?
Look, thank you for that. I'm going to ask Marnie to comment in a minute, but actually, I was listening to the CBA once I heard your question there, and I heard their answer that they'll make that available to the industry, so that was very encouraging. Marnie might have more details about exactly when and how, but that was very encouraging that they would do that. As we've both talked about, scams and frauds are a cross-industry issue and more than just banking industry, as I've also talked about. So we're very, very focused as an industry on supporting each other through this, because in doing that, we're supporting all customers, and that's really, really important. But Marnie, more to add there?
Yeah, just in relation to from an industry perspective, you know, we talk a lot about the competition, but in the banking industry, and that, and that's right. But this is one area that the banks actually don't compete on. We are all working together as an industry to ensure that we're working against this criminal activity. So, there is a lot of things that are being developed across the industry within individual banks, including our own, and we share that knowledge across the sector. And you know, like Jacqui said, with the CBA and what they have been doing, are making that sort of available to the rest of the industry as well, the same as we, in our conversations, also ensure that we're providing any assistance that we can to other banks as well.
So, you know, this is, it's, it is criminal activity. Jacqui spoken quite a bit about this. And, whatever we can do, not only as a banking industry, but as an ecosystem, which brings in, you know, social media platforms, it brings in telecommunication. Anyone there that is, unfortunately, has been bought in to be a party to, or a part of the process of any criminal activity that occurs, we are all working together, including the government. And, you know, and there has been a lot of inroads that have been made over the last 12 months within our own organization and more broadly across the industry, and there'll be more to be done, because we don't see this going away.
You know, we are working really, really hard to ensure that we continue to protect the information and money of our customers.
And thank you as well for the work that your organization does, 'cause this is, as Marnie said, it's multidimensional, and so the more that people are talking about it, the more they're aware of it, the more they'll have that kind of, unfortunately, non-trusting view of some of the things they're getting. And that's, you know, it's everywhere that we need to be attacking this. So thank you very much for your organization's work on that, too, in helping educate people. Have we got any more? Yep, we've got one more question.
A question from Rita Mazalevskis, Jacqui.
Just in regards to cyber crimes and what we've been talking about. In regards to data breaches, if the bank has a data breach that has caused or is likely to cause serious harm, organizations are required to notify the affected individual and the Commissioner of the Office of the Australian Information Commissioner, through notified, notifiable data breaches under the Privacy Act. Also, under the European Union General Data Protection Regulation, Australian businesses are required to report data breaches. So I wanted to find out, has the bank had to report any data breaches through either of those formal avenues, through their obligations? And in an extension to that, with the spending on IT systems, there's no way you can guarantee protection of data 100%.
What increases to IT systems are happening, and how frequently are these systems being upgraded and monitored under the board's risk framework, to give customers comfort that their data is being protected as much as possible?
Yeah. Again, another very topical question and a very topical area. So, the way from a board perspective, we look at it, is we have a number of committees. The Board Risk Committee owns cyber, data, and every other risk, but we actually discuss it every board meeting as well, because it is such a big issue for the world at the moment. So from a board perspective, we're very commonly talking about it, investigating it, interrogating the investment that we make in these areas, the resources that we have, the skills that they have, the work that we do with other banks within the industry and other parties outside the industry, 'cause this is a, you know, we've talked about it a bit now, but a multidimensional approach.
So, data, it comes into the same category as cyber. It's really... Data protection is really important, as is cyber protection. So the board manages that directly through the Board Risk Committee, and obviously from a management perspective, we have a number of executives who are responsible for that on an ongoing basis, and we're certainly well aware of all of our privacy obligations and our notification obligations, so we take those very seriously.
I'm not sure what more I can say in terms of what we do, because we cover so many different things these days in terms of being able to protect our IT systems, our customers' data, every interaction that we have needs a level of protection, and we focus as industry-wide is focused on various different elements from overall protection down to individual protection of our most valuable systems, which, of course, is our customer data. So it's a huge issue, it's a big issue, and one of the big things we do at the board is to make sure we're investing appropriately and working appropriately as an organization. So thank you for your question.
Can I just clarify?
Yes.
Have there been any data breaches reported?
Sorry.
Have there been any data breaches reported, say, in the last- ... 24 months? Oh, 12 months.
No, nothing, no big serious ones, obviously, or you would have heard about them, but Marnie?
I think it's worth recognizing that the legislation and so forth that's in place and the agencies that are in place. You know, when you refer to privacy, you know, et cetera, if something was to happen in a physical form, and a document that had information, confidential information on that got, I don't know, a cleaner picked it up, and someone got access to it they shouldn't have. Those sort of things, yes, they need to be disclosed and not only to the customer, and the first point must always be to your customer, because you need to ensure that they are aware of where their information may have been at any point in time, if it has got into the wrong hands.
But also to, like I said, to those agencies or those bodies as well. So this is something that's not new to the organization. It feels like it's on steroids, a bit now, just given the cyber nature and the digital nature of things, but this is something that's always been in place. And, you know, it's the right thing to do. If for some reason we haven't handled someone's information correctly, then we would always let our customers know about that.
So and then from a board perspective, just to say, in terms of a major data breach, of course, you would be aware of it. From our perspective, we look through a whole lot of data that talks about near misses. As Marnie said, I think we had something stolen from someone's car at one point. So we get down to that detail as well as obviously at the bigger detail of some things we've heard about. Thank you. Okay, do we have another question there? And then I'll go back to submitted press questions.
We have another two, another two questions, Jacqui. Another question from, Milton Wilde.
Milton, I really can't talk about your case, but I'm happy to take any other questions from you.
No, that's... I know. I'm curious about the expansion or potential expansion to Queensland with the possibility of you looking at taking over Suncorp. Is the board aware of the Hansard records of 2013 from a then MP, Dr. Alex Douglas? And if not, can I suggest they look into that?
So, thank you. We will. But can I just say that given we didn't engage with Suncorp, we're not at a position of saying we were ready to take them over. We're at a position of saying we would like to have engaged. So given the process is ongoing, we'll let that process go, see what the outcome is, and then determine where we go from there. But again, we'll focus on our organic strategy, hard in the meantime, as we should. Thank you.
Another question, Jacqui, from Grant Goodwin.
Yes, Madam Chair. It's just a, probably a more so an operational one, but in your branches, and well, certainly the one in Devonport, Tasmania, you've got a slogan that says: "We've got your back because you've got ours." Are they just weasel words, or do you actually formulate that within a board, or does the CEO take care of that sort of thing? Or this is just up on the board for people to feel good?
So they would definitely not be weasel words. We don't at the board decide what's on each branch wall. So that's clear. But I would imagine that those words have come from the people in the branch or working with the branches, who are usually very, very... I don't know your branch particularly, but usually very, very genuine people who are engaged in the local community and interested in the local community. So I would imagine they would come consistent with who we are as a company, and have been for many years, from a place of genuineness. If you didn't like the particular words, I get that. Some slogans work better with some people than with others, but they would have come from a place of genuineness, I'm quite sure.
But they haven't come from the actual board? You don't-
They're not the kind of things that we pay attention to.
Thank you.
We make sure we have genuine people in our branches, and that they would have come from them for sure.
Thank you.
So, Robert, I know we've got some previous question, previously submitted questions, so let's keep going through those, see if we can get through a few of those.
Thank you, Jacqui. Your next question is from William Collier, shareholder, who asks: "Why has the bank closed agencies around Bendigo, including Golden Square? This is not providing for the elderly." We also received a similar question from shareholders John Payne and Frank Barnes. Their sentiment can be best encapsulated by the following question: "Why has the bank closed several agencies this year, and will there be more agency closures in future?
Look, thank you. I know agency closures are have been a particular topic of interest, so I clearly understood we might get a question on this. So I think it's important for me to just say that our agencies differ quite substantially to our branches, just for those who are not aware. They offer a limited range of services, and they're usually offered to customers in locations where there's not enough demand to sustain a branch. And we understand, and we've been acutely aware, as Marnie particularly has, but all of us as the board, that in closing agencies, some people are very affected by that. In some cases, it happens because the principal sells the business.
It might be the principal chooses not to do this anymore because there is an investment by them, and/or it might be new owners of the business choosing not to take up that responsibility, because they do have to do staff training and compliance commitments, of course. So where we've had to close agencies, we have worked with the impacted communities to try to ensure that transition is as smooth as possible. And I acknowledge that that absolutely not everyone's supportive of the change. I've talked before about balancing between our shareholders, our customers, and our communities, and that balance is something that is ongoing and really a big part of what our management team and our people focus on.
So we have spent some time visiting those impacted communities, I know, to discuss those closures and discuss what other options are there, like Bank@Post, for example, through Australia Post, which offer a similar and comparable range of services. Perhaps it's also important to say that the agency model was developed, oh, decades ago, Marnie, maybe before your time, certainly before mine. It was a long time before there were smartphones or internet banking or Australia Post offering their Bank@Post or even before ATMs. So given the change in customer behavior in recent times, our corporate agency model has absolutely come under commercial pressure, and there's been a significant decline in the transaction numbers in them, and so we just, unfortunately, can't continue to support them in all areas.
We do still have some. I don't, I'm not suggesting it's the end of them. They are often attached to our community banks and so they continue to operate. Robert, next question?
Jackie, your next question comes from David Parks, who asks: "When are you going to return the shareholder benefit of 0.25% on short-term investments?" There was a similar question from shareholder Rosalind Clark.
Yeah, look, I, in relation to that, on short-term investments, we don't have any immediate plans to reinstate these benefits. So I don't want to give you false hope, but we continue to look at that. But what we look at is all shareholders and the returns to all shareholders versus a smaller group of shareholders getting a slightly different return or benefit. So it's something we'll continue to look at, but it hasn't been something that we've offered for some time. But we'll keep looking at it without giving you false hope that we're making an immediate decision to change it. But thank you for your question. I understand why you ask, and I appreciate our shareholders, who are also our customers, very much.
Robert, any more questions online, pre-submitted or online?
Jackie, your next question comes from Denise Carter, who asks: "Six months or so back, I transferred a large sum of money from Bendigo to another bank, as Bendigo were not prepared to offer the same amount of interest. I thought, what a funny way to run a bank, by letting your customers take their money elsewhere.
Look, thank you,
A similar question about deposit pricing-
Sorry.
Was raised by shareholder Luigi Picello.
Thank you. Thank you to both those shareholders. In terms of the pricing of our term deposits, there are a number of factors involved, as you would imagine, and the most important of those are our requirements for funding at any point in time. And the pricing for deposits of a particular term length will often reflect our need to fulfill our lending of that same or similar duration. So, we don't always... You shouldn't always assume that if you checked at one point, the deposit pricing or the ranking in that is the same. It varies greatly, because the way that we do it is the same that all banks do it, in kind of matching both parts of their balance sheet. So I'm sorry we couldn't help you at that time.
Please look again next time it's ready, and you might find it different. We also obviously expect to balance the returns for all of our stakeholders, and that includes our shareholders, who expect an appropriate return on their investment. Includes our borrowers, who expect an appropriate competitive rate, and of course, our depositors, who might be prioritizing calls or different at-call accounts. So we aim to do that balance, and frankly, balancing our balance sheet is the core business of who we are as a bank, and we continue to do that. We might go. I can see we have another question there. I'd just ask, and I'm very happy to take another question from you, Mr. Caulfield, but if there are any other shareholders who feel like they need to have a chance to ask a question in person, please feel free to line up as well.
A question from... Sorry, Jackie. A question from Craig Caulfield.
Oh, thank you, Madam Chair. National Farm Debt Mediation is one of the remaining outstanding matters from the Hayne Royal Commission. Bendigo Bank, with an excellent footprint in rural areas and supporting agriculture and farmers, this would be something very important. We've got a ragtag of state-based schemes at the moment that aren't consistent. It's been recommended to be consistent. I've observed every bank, including Bendigo Bank, advocating for a national scheme. Nothing's been done. It's very frustrating. It's going to benefit the banks to have one scheme instead of a range of schemes. It's going to benefit the farmers, because some farmers have properties that straddle boundaries or have multiple properties across different areas. It's gonna, you know, help courts, it's gonna help mediations, it's gonna help all of these things.
Particularly thinking of Marnie being on the, you know, the deputy at the, ABA, what can you do to push this forward and advocate for this national, national scheme? And I recognize it seems to be the sticking point is to do with national legislation versus state-based legislations. But if this is something that both Liberal and Labor governments and the, and all the minor parties have said, yes, they'll bring in, and if it's something that all the banks have said, yes, they'll bring in, what, what can you do, Marnie, to, to, to escalate and, you know, rapidly increase this and let's get this going?
Look, thank you for your question. I, I think you've summarized a frustrating situation very well, and couldn't agree with you more, that, that, national approach to many things would be helpful both for customers and, and for, for the financial industry. I know Marnie, uses her position as deputy chair of the ABA to push through many things. This is one of them. The other, the other many things she does is to make sure that competition is, is not forgotten, to make sure that regional rural Australia is not forgotten. But Marnie, is there any hope you can give?... Mr. Caulfield, on this one, other than we will keep pushing because it, it is a sensible thing to do.
Craig, I'd love to give a bit more hope. We'll continue. We'll continue to keep pushing that. It's, I think you're right around the federated system that we have here in Australia and the state-based legislation. You see it in all forms. Trying to get national legislation is tough, and to get that through, but that doesn't say that we stop trying.
Thank you. Colin, do we have more questions from the floor?
I have a question here from Norm West.
Thank you. First of all, Chairman Jacqui, not Madam Chairman, best wishes for the future, and thank you on behalf of shareholders for being available and very good humor and taking the tough questions as best you can. So best wishes again.
Thank you.
The question, it's for the auditor. The auditors raised controls on financial reporting, because of appropriate, or inappropriate user access and unauthorized programs and various other things. In a time after COVID and working from home, it's changed the whole complex of a lot of businesses, and I don't think Bendigo is any different. So the question to the auditor is: what has the auditor done differently to pick up on these traditional problems with staff working from home?
I might start with that, and then I'll hand over to Tim. So, user access is an issue that is well focused on by many companies because it is a first line of defense approach to protecting data or protecting our systems. So it's a really important access, and we make sure that we internally, through our first line, our second line risk area, and our third line internal audit area, focus on this quite consistently and cycle through it to make sure that it's as good as it can be. Our auditor also looks at this for us, and they do this across companies, because as you say, it's always been important. It's never been important than it is now. So maybe, Tim, if you'd like to more broadly talk about-
Thanks, Chair.
Across industries.
Mr. West, thanks for your question. We spent a lot of time planning the audit, and when we plan the audit, we consider a number of things that have changed and what has occurred. And certainly through COVID, was a significant change in how the bank operated and also how we conducted our audit processes. As the chair has said, access controls are very critical to the audit process and the key systems we do test, so we do test those to the point where we can rely on them. To the extent there are failures in some of those areas, we do the alternate testing, to ensure we can place reliance on those systems. Thank you.
Thank you very much. Hopefully, that answers your question, Norm. Thank you for your good question. I'm conscious of time, and I know we have some more pre-submitted questions, so I might do a last run-through of questions in advance. So please, not in advance. I meant in person. Tripping my words up here. Let's do a last run-through of questions in person. So if there are any more, please line up. We'll go through those. I'll finish the questions in advance, and we'll move on to the next. We're only at point one, the next point of the meeting.
A question from Rita Mazalevskis, Jackie.
Firstly, before I ask my question, I've flown here from Perth this morning early, and I leave this evening to go back. I just wanted to know whether, Marnie, you would be prepared to have a brief meeting after the AGM?
Hi, Rita. Good to see you again. I'm always prepared to, so more than happy to.
Thanks. Can I-
Oh, sorry.
No, no, no. Can I just say, when I opened the annual report, every year I've been asking about securitization, and I've never been able to get a firm answer at the AGM. And blow me down, this annual report has got it plastered throughout. So congratulations. It's about time there was disclosure of this issue, very serious issue. I just want to get clarity from something on page 166 of the annual report, the annual financial report, that is.
It says, "The group has exposure to a number of securitization vehicles through residential mortgage-backed securities, and that securitization involves transferring assets into an entity that sells interest to investors through the issue of debt or equity notes, and the group does not receive any residual income, and the group does not act as the primary trust manager or servicer of any of its unconsolidated structured entities." So what I would like to know is, given that it talks about the transferring of assets, it doesn't actually say anything about the debt slash loan to the borrower. So does this mean that the debt transferred with the asset to the different entity when it was transferred, or was the debt sold on its own to another totally different entity?
Marnie, do you want to take that now, or Andrew Morgan, our Chief Financial Officer, and Marnie could have a chat to you afterwards? Because that's probably a bit of a detailed question to take here, but let's get our CFO and our CEO to explain that to you afterwards.
It's actually very simple. Did the debt go with the asset or didn't it?
I don't have that paragraph in front of me, so I'd rather let our CFO and our CEO answer that to you directly.
... I'm sure the shareholders would like to know.
I'd like to know.
It's a very simple question.
It depends on the securitization program itself, which is why we need to actually understand your, your particular situation. Because there's equitable assignment, there's actual assignment, et cetera. So we do need to. It's not a general question that I can just answer.
I'm referring to what the bank says, not anything about me. It's just saying that it's where it involves transferring assets into an entity. So when it transfers the asset, does the debt follow or doesn't it? It's either yes or no.
The debt is still need to be repaid.
Does it follow the asset, or is it sold to a totally separate entity? It's still no-
It depends on, it depends on the makeup of the securitization trust.
I don't want to be not transparent with you. I really appreciate the fact you've flown in from Perth for this meeting.
Yeah.
I do think this might be one where you should talk to our CFO and CEO and get that answer that you need, because there sounds to me like there's a bit of detail and there's a bit of a, "It depends" exactly what,
Yeah
... we're talking about there.
It's just unfortunate you've gone to such lengths to lay it out beautifully in the annual report, if I must say, and like I said, I was totally shocked, and that it's not clear.
Okay.
So we can't get a straight answer.
So, we aim to listen to feedback and do our best to respond to it. Obviously, if we're not talking about something and it's important, we'll try to talk about it. Some things are very complex, and so they are hard to put all the scenarios related to it in an annual report. It's a very important report, so we're trying to be as transparent as we can and to include as much as we can. But for anything very specific and it depends on a number of things, I'd really rather our CFO and our CEO spoke to you afterwards.
Thank you.
Thank you. Okay, let's do a last question internally with, in person, sorry.
A question from Craig Caulfield, Jacqui.
Oh, thank you, Madam Chair. Perhaps for the auditor or the audit committee. About a year ago, I was at the ANZ AGM, and I raised a question, and a response from Mr. Elliot was that artificial intelligence was being used as, as it's coming in, and found 2,500 loans that were not compliant, whether they're fraudulent or something was wrong, that they might have approved that the artificial intelligence exposed. So 2,500 loans from one bank in one year is a lot different. Are you using artificial intelligence? And I'm interested in, in the audits of the loan application files, the actual, loan application files that come from the client, to see how many of those are audited. I've been to some banks who say, "We don't audit any at all.
We look at the system overlying it to make sure that that's right, but there's no loan application files. You were watching the Commonwealth Bank AGM. I asked Mr. Comyn there, and I said, "You know, why don't you audit, you know, 100?" He said, "We audit well over 100 loan application files." So I've got two parts to the question. One is on, are you using artificial intelligence and auditing the loan application files? How many actual files, rather than just the structure above the audits? Thank you.
Thank you. So in terms of artificial intelligence and machine-based learning, that is something we're starting to use because it does allow an interrogation, in your example, of a large, of a much broader set of data. So, again, I'll ask our auditor to talk more generally about how audits are using technology more intelligently and more comprehensively to enable a better overview of the integrity of our financials, which is really important, and the integrity of our customers. But it is artificial intelligence, machine-based learning, technology has a lot of back office potential and capability to assist everyone in this area, and we'll certainly use it from that perspective. We are also still wary of the security and the inherent bias and some other aspects in artificial intelligence.
So we're watching it quite carefully and using it quite carefully, noting that it has potential. But Tim, in terms of-
Thanks, Chair. Perhaps I might describe a couple of things on just how we do audit the loan process. So, statistically, we do select a sample of loans. It's quite a large sample of loans, right from application, fulfillment, and right through to disbursement. In relation to the use of, I'll call it alternative technologies, perhaps we're not quite at the AI level yet, but we do use enhanced analytics, so that is not only in selecting the sample process, but over interest rate calculations. In addition, we also send confirmations to customers as well, and we don't always get those back, but they are sent out to confirm the balance and the existence of that loan as well.
Thank you. So I've just got in my ear that there are a few more pre-submitted questions, so I'll, I will take those. Is there ... just before I do, is there anyone in the audience that hasn't had a chance to ask a question that wants to? Then I might say, we'll, we'll all be there after the meeting to take any further questions from, from anyone who's here physically, but I'll just go to the online or the pre-submitted questions for people who weren't able to be here today. So, Robert, back to you. Let's go through any remaining questions.
Jacqui, there are no live questions at this stage, but there are five more pre-submitted questions. Your next question is from Richard and Wendy Wallach, who ask: Is the board considering either a merger or takeover of either Suncorp Bank or BOQ?
Thank you. Look, I think we've answered the Suncorp part of that already. From a BOQ perspective, we just don't comment on mergers and acquisitions, but we're very focused on our own organic strategy. So Robert, let's go on to the next question.
... Your next question is from Sean Rooney, who asks, "Using the Community Bank model, why aren't you making greater inroads into the overall market and having increased market share? Why don't your products compete on an even footing with the Big Four if the service offering is better?" We received another similar question from Gregory Bloomfield, and the general sentiment could be best encapsulated in the following question: "What is the future of the Community Bank model?
Look, thank you for those questions. And I'm always happy to talk about Community Bank. I'm conscious how long we've been going, so I'll keep it brief. But I did mention it's in our 25th year, and Marnie talked about more than AUD 320 million's been contributed back to the community since we started, which we're very proud of. Our Community Bank partners are really important to us as part of a long-standing social enterprise arrangement that deliver just amazing benefits to local communities throughout Australia. They're also important to us because they've gathered over, I think, something like AUD 50 billion in deposit and loans since inception and around AUD 11 billion in net funding. So we're focused absolutely on taking what makes it special in the Community Bank model and ensuring that continues to deliver for the next generation.
When it comes to pricing of products, I think I talked earlier about that balancing that we need between all of our stakeholders, shareholders, depositors, and our lenders, and matching our balance sheet is really key. We'll aim to be competitive across a range of products and services. We are growing in customer numbers, so we hope that we're doing that. Having said that, as I said earlier, we won't always be the best price at every point in time, but we will be often, so we hope you'll continue to look at us. We'll make sure that we, on behalf of shareholders, continue to set our market pricing where we can cover our cost of capital, which is important, important factor for the shareholder cohort. Robert, any more?
Yes, Jacqui. Your next question is from shareholder Brendan Gibson, who asks: "Why has Bendigo SmartStart Super performed so poorly?
Thank you. I'm guessing you're probably talking therefore about the growth and high growth options. And there are a number of reasons for this. Among them, particularly the performance in the short term, was very impacted by a number of well-known things we know is going on. The global instability following the pandemic. We've got the war in the UK... In Ukraine, sorry. We've got supply chain disruptions. Inflation is a well-known issue to all of us. So given these, and I won't speak on behalf of the trustees of the fund, but I can imagine the fund was positioned more defensively in that period, resulting in a larger allocation to some of the lower risk asset classes, which is a prudent thing to do in an uncertain environment.
So possibly, more focused on cash and fixed income and other alternatives, rather than equities. So I suspect that's the answer to your question. I think we might have just a couple of more, and I'll-
Yes, Jacqui.
Try to do them quickly, so-
Your next question comes from Antonio and Barbara Orlando, who ask: "Why not have a practicing bank services consumer, who's also a shareholder, on your board?
Yeah, look, thank you for that. We, as a board, we always make sure we have a broad, range and mix of skills and experience represented on the board. All, all of your board's a shareholder. We're also practicing bank consumers. I have, a number of, banking products with Bendigo and Adelaide Bank, and I, never call Marnie and say, "Well, do this or do that for me." I go into my branch, I call the call center, or I do it online so that I'm trialing all, all aspects of it. So agree with the tenet of your question, because it's really important we understand customers, we are customers, we understand shareholders, and we are shareholders, and, and we do, all of that. So Robert-
on the board.
Thank you. Robert, any other questions?
Jacqui, your last question for this section of the meeting comes from Stephen O'Rourke, who asks: "Please outline your staff engagement and training program to lift capability." In a separate but related question, Mr. O'Rourke asks: "Please outline cultural value development strategy.
Well, look, thank you, and it's nice to have a question about our people, 'cause our people are the backbone of the bank and the reason why we perform so well in many aspects of external evaluation of us. So thank you for that question. Look, we're building an organization that is more productive and is more skilled and is more innovative. And we actually have something called BEN U, which is our corporate university, and it's dedicated to our organizational capability and helping our people enhance their capabilities and their skills that are important both for their career development and for the organization's performance.
So we've invested in technology to enable all of our people across our entire network to access this learning, and we design contemporary learning around leadership, technical banking skills, obviously, risk and compliance, climate, nature, digital, and much more. So we're very proud of that, and it's an important part of helping our people be the best they can be. In regards to culture, we are and have aligned culture at every level of our organization for quite some time.
Since 2019, I think, certainly before the pandemic, we've had a process of working on our culture and supporting that and making sure that our cultural priorities at an enterprise level, and particularly around risk culture, demonstrate our commitment to doing our best and to being our best, to uplifting our risk management capability and making sure that's embedded through our organization. This is a topic I could talk on for a long time, but I'm conscious, we've been going a long time, and we're still on point one, so I do know that there's some shuffling here, and I need to move on. But please look at our sustainability report, 'cause that has a lot more information there.
Our head of HR is here, and she would always be happy, as I am, to talk more about our people and what we do. So Robert, are there any more pre-submitted or online questions?
... No, Jacqui.
Thank you. So this concludes. I noticed there's someone there. So two more questions. Could we do them, make them very quick? Because we will talk to you afterwards. So let's take these last two.
A question from Milton Wilde, Jacqui.
To the board in general, given ASIC's recent prosecution of Bendigo in regards to unfair contract terms and the subsequent court ruling in relation to that, has Bendigo made a decision or determination in regards to looking at their existing contracts and how to root out those unfair terms that exist in their own contracts?
Thank you, Milton. This was something that I answered in AGM two or three years ago. I think it relates back to that. And yes, we have updated our terms and conditions, and that was part of our what we needed to do. It's very unfortunate. It was from a few years back, and we've absolutely updated them.
A question from Rita Mazalevskis.
Just through the auditor, Ernst & Young. Just given the current environment with the ASIC investigation through parliamentary inquiry, which has been extended to look at the breathtaking tax scandals of PwC. With the fine that was placed on Ernst & Young, the $100 million penalty by the Securities and Exchange Commission in regards to employees cheating on CPA ethics exams and misleading investigation, they say that this action involves breaches of trust by gatekeepers within the gatekeeper entrusted to audit many of our nation's public companies. It's simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams, of all things. So what has Bendigo done in regards to the auditor, EY, to check this compliance of the auditors that are involved with preparing the Bendigo books?
Yeah, I might take this in two parts, Rita. So in terms of our audit, we undertook a tender for our external audit services, I'm going to say, a two, two and a bit years ago, maybe. I might have that, but in that timeframe. And of course, in looking at that, we looked at the breadth of the audit community to see who could serve us best, not just on price, but on ethics and values alignment with the Bendigo Bank. The second, so we've been through that, and we've made an assessment, and we've set in place processes accordingly. If I go more broadly than just external audit, so on auditors and on internal audit and on consulting firms, they are a part of our world today. We do use them.
We need to use them. We've set up specific processes more recently as well, to ensure that in using them, we thoroughly assure ourselves of our approach to how we're using them and their approach to how they're interacting with us. So thank you. So I might now conclude that. As I say, we will be there afterwards if any people in the room want to talk further. But we'll now conclude that item of business and move now on to the other formal items of business as set out in the Notice of Meeting. We'll take questions on these, but I suspect they might be a bit quicker, so thank you for your patience. I know the sandwiches and a cup of tea is waiting too.
So these items of business do require voting from our shareholders, so I declare that voting is now open on all items of business. Please submit your votes at any time during the meeting. I confirm that where undirected proxies are given to me, I'll vote in favor of all resolutions to the extent permitted. So the next item of business asks shareholders to consider, and if thought fit, to pass an ordinary resolution that Margaret Payne, who retires from office under Rule 59 of the Bank's Constitution, be elected as a director of the Bank. So I'd now like to invite Margaret to address you in support of her election.
Thanks, Jacqui. For those who are vision impaired or listening via telephone, I'm wearing a dark jacket, and I have shoulder-length hair, and I'm extremely tall, but you can't see because I'm sitting down. So almost my entire career has been spent in financial services, in finance strategy, operational risk, and business roles. Work's always been an important element of my life, and at this end of my career, I will spend the rest of my working life working with organizations whose values align fully with my own and where my long career experience is relevant. Joining Bendigo and Adelaide Bank last month took quite a long time, took nearly a year, and allowed me to understand that the stated values of the bank are the lived values.
Trust, being part of the community, thriving are both important to me and are real in the bank. Integrity of the messages is very fundamental really to me joining. My focus has always been to set things up for the long term, not for the short term, which means balancing outcomes for all the stakeholders, not just for one segment, so people, shareholders, community, and environment, and this is key to building a sustainable business. Hopefully, my diverse set of experiences, which have covered almost all facets of financial services in several geographies and continents, in and outside Australia, will be of benefit to the bank. This wide experience can sometimes help understand what's true rather than usual.
My background includes roles that have dealt with change, helping businesses adapt as the world evolves, something that technology is driving us all to do, which is a challenge to do without losing the humanity around our interactions.
My background also includes involvement in risk management and matters important in risk management matters, which is important as the bank's principal business is managing risk for appropriate reward. I'm currently a member of the bank's Board Risk and Financial Risk Committee, and hope to contribute to ensuring the governance of risk across the company remains strong. I was very pleased to be appointed by the board to join them in September, and I'm hoping that, that you, the shareholders, will now appoint me to serve the company going forward. I'll always do my best to serve the best interests of the company and its stakeholders for the future. Thank you.
Thank you, Margaret. Robert, were there any pre-submitted questions regarding this item of business?
No, Jackie.
Thank you. Then, Colin, are there any questions in the audience?
No, Jackie.
Robert, sorry, I should have asked, any online questions?
No, Jackie.
No. Okay, then we might continue on to this one. So with Margaret abstaining, I can confirm that the board unanimously recommends that shareholders vote in favor of her election. The direct voting and proxy details received prior to the meeting will now be displayed for your information. For those listening by telephone, the direct votes and proxies received at the pre-voting cutoff time are 96.73% in favor of the resolution, 0.75% against the resolution, and 2.52% open votes. So please, if you haven't already, do your votings on that item, and then we'll move on to item three. And I'd like to introduce Vicki Carter, who's chair of our People, Culture, and Transformation Committee, and ask her to share a few words with you on our remuneration.
We'll play a short video as she comes here and does a short address to you.
Here we are, back in 2023, together at the Community Bank National Conference.
It's an amazing community atmosphere. Everyone getting together like a big family.
But it's also, I think, really looking out into the future. Technology, you know, preparing ourselves in terms of where the bank's heading, and that's what we wanted to achieve.
I realized what an amazing opportunity we have in banking to really do some good in people's lives.
Realizing that what it's all about and why we're doing it, get back to that kind of grassroots.
What I'm asking from you today is to start the next phase of the movement and be the catalyst for change by reimagining the next 25 years.
Good morning or good afternoon, everyone. My name is Vicki Carter, and I'm the chair of the People, Culture, and Transformation Committee. For those listening, but not able to see me, I have straight, mid-length, light-colored hair. I'm wearing a, a black jacket and a green shirt, and I'm short-statured. As chair of the committee, I appreciate the opportunity to talk to you this morning, our shareholders here in the room, and also to those of you online. I'd like to start by briefly talking a little bit about our committee. Our responsibilities extend beyond simply setting executive compensation. We're entrusted with ensuring that our compensation practices are aligned very much with the company's values and our goals, and also the long-term and sustainable interests of you, our shareholders.
In today's fast-paced and ever-evolving business landscape, attracting and retaining talent is paramount, and our ability to do so relies heavily on the effectiveness of our compensation structures and also our employee value proposition. Striking the right balance between in-market competitiveness, alignment with company performance, and the interests of our shareholders is critical, as is our commitment to fairness and transparency. Sound governance principles guide us in this endeavor. Compensation structures and incentives that incentivize and reward employees for their impact are really important for us, along with ensuring that our people work towards the strategic objectives of the organization while maintaining ethical and responsible conduct. Diversity and inclusion are fundamental values that we work toward continuing to embed in our bank.
Fairness and equity for us are not mere buzzwords; they're integral components of our decision-making process, and we're committed to addressing any pay disparities and fostering an inclusive workplace. As we look back on the past year, we believe our people should feel very proud of their achievements as they work towards delivering on our vision to be Australia's bank of choice. In the financial year 2023, the board approved a new executive reward framework to ensure compliance with APRA's Prudential Standard CPS 511. This meant that the chief executive officer and managing director's remuneration structure was revised. Our key considerations as a board included acknowledgment that there had been no increase to the CEO and MD's REM since commencing in July 2018. Additionally, three of our executive team received fixed remuneration adjustments, and these were supported by market benchmarking and also performance considerations.
The short-term incentive scorecard assesses performance across a range of metrics. It covers elements like financial, Risk Capability Uplift, Customer and Community, and People and Planet.... Overall, the bank exceeded its financial targets. However, our performance against some of our non-financial targets was mixed, and it was below target for Customer and Community, and People and Planet. This resulted in the overall group performance outcome of 110% of target opportunity. The board believes this is reflective of the bank's overall performance, acknowledging that we have more work to do in some of those areas. The financial year 2022 Loan Funded Share Plan grant was tested, and three of the four tranches met the performance conditions. This award has additional conditions related to ongoing service and a risk assessment, and it remains restricted for a further two years.
With respect to the long-term incentive that was granted in financial year 2020, tranches linked to customer advocacy vested, while those linked to total shareholder return lapsed. In the board's view, the remuneration outcomes for financial year 2023 are fair, given the overall group performance. For next year, financial year 2024, the overarching remuneration framework will remain unchanged. The board has agreed to an increase in the CEO and MD's variable reward opportunity, which includes a short-term incentive opportunity of 65% of fixed remuneration, as well as a long-term incentive of 65% of fixed REM as well. All executive key management personnel, excluding our chief risk officer, will have a maximum short-term incentive opportunity of 60%. For our CRO, the maximum STI opportunity will be 50%, and this is in line with market practice for risk-related roles.
The LTI opportunity for our executive key management personnel will be 40%. The bank's remuneration philosophy and framework provides the board with the ability to make meaningful risk adjustments and the application of consequences where necessary. We believe the overall level of reward offered to our executives is modest compared to the market. We'll continue to monitor remuneration arrangements to support our future direction, such that we are able to continue to attract and retalent, talented people who are committed to the communities that we serve. We will also proactively respond to changes in regulatory requirements as necessary. Thank you very much for your input today. Your feedback is invaluable for us as we make decisions into the future, and I'll now hand back to the chair. Thanks, Jacqui.
Thank you, Vicki. Now moving to the formal resolution as set out on item 3 on today's agenda. Shareholders are asked to consider and if thought fit, to adopt the Remuneration Report for the bank, as set out in the annual financial report for the year ended thirtieth of June 2023. I can confirm that while each of our directors has a personal interest in, in this resolution, the board unanimously recommends that shareholders vote in favor of it. As you know, the vote on the REM report is advisory only and does not bind the company or the board. However, the board will take the outcome of today's vote into consideration when we review the remuneration practices and policies of the bank going forward. I'm aware we have had,
I've been told we have had a number of pre-submitted questions, so let's go to those, and if anyone has a question in person, please, go to the microphone while we do those. So, Robert?
Yes, Jacqui. We received a question on remuneration from Hilda Caceres-Violet, shareholder, who asks: "Why is the remuneration report not public information?" We also received questions from Gerald McArdle and Sean Kerwin on remuneration. The general sentiment from these shareholders can be best encapsulated by the following question: "How do you justify paying executives bonuses on top of their fixed annual salaries?
Thank you to the shareholders for those questions. Just on the first one, at the outset, I want to assure, assure you that the remuneration report is public. It can be found on our annual report, I think, starting on page 46. So it, it's there as part of our annual report. It's available every year, and it's available on the Investor Center of the Bendigo and Adelaide Bank website, if you haven't asked for it to be sent by mail.
So our executive REM structure, if I kind of go on to the second part of the question, is based on many aspects of performance, and those variable REM targets, which are very standard across the industry, and ours are very modest compared to the industry, are set to ensure that executives achieve variable REM based on targets that are aligned to shareholder outcomes. So the company's strategy delivers the shareholder value through financial returns, risk culture, or shareholder value, and the executives' contributions are then assessed at an individual level to make sure they're also meeting the board's expectations. We do want to attract the best people to run your bank, and we do need to offer market competitive REM, so variable REM is part of that. So thank you.
Was there more than one question submitted in advance, Robert, on this topic?
No, Jacqui.
No questions in the audience?
Have no questions—
Sorry, one question in the audience.
A question from Craig Caulfield, Jacqui.
Oh, thank you. First of all, I neglected to talk to the people that are visually impaired, if that's the correct term. I'm tall, I'm fat, I've got gray hair, and my brother says I'm slightly balding. Most people haven't seen it, but I sat on some chewing gum when I was on the bus. Now, page-
I'm not going to make a comment on any of that, except I hope you have a good dry cleaner.
Thank you. I want to talk about Net Promoter Score. Page eight, you've got a picture there that says, "Plus 23.2 Net Promoter Score," then in red, "28.4 points higher than industry average."... I think they're back to front.
Oh, sorry, had you finished your question?
I think the Net Promoter Score is 28 points, and you're 23 points above the industry average. But if I'm wrong, that means all the other banks together are in negative territory, and I know CBA, for example, is positive 4. Of course, you're a lot, a lot further ahead from them. I'm just pointing that out. That's not my question, really.
Yeah, so can I just comment on that?
Yeah.
Because the Net Promoter Score, as we measure it in Variable REM, is not an absolute score. It's more than 20 points above, I think it's called the average of our competitors. And that average, whilst you talked about the CBA one, the average is a minus score. So in fact, the re-- the results in there are correct.
Okay, then it's incorrect on page 52.
And so it's... Sorry, just to be clear.
Yeah.
It's above, it's a relative score to above the industry average, is how we do the Variable REM.
Yes. Oh, I understand Net Promoter Score very well. I've raised it for years, including at Bendigo and at many other, AGMs, but I think it's back to front, because on page 52, under the year 2023, it's got a list there. Anyway, I'll leave that, I'll leave that aside. I find that the Net Promoter Score, as a non-financial metric, is inadequate and frankly, misleading. Using Net Promoter Score is okay, and it can be included in a parcel of other metrics, but Net Promoter Score can be gamed, first of all. You know, staff can say, "Press the button." Yes, someone's happy, and then they'll send their rating back. Someone's not happy, it's like, "Don't send it back." The weighting, the relative weight, so someone that has their house repossessed, "Oh, how will I rate the bank?
Zero." Someone says, "Well, the lady was courteous to me in the store today. I'll rate them ten." Well, really, a house being repossessed versus a happy customer for that moment, that it doesn't go into those ratings. Now, I'm not anti the total REM package for Marnie Baker. I am anti the transparency behind the Net Promoter Score, and that you're not using enough other metrics there. I mean, it's quoted so many times. It's not a stretch for the... You're requiring Marnie to come up with +20, I think that's correct, each year. Well, 2019, +28. 2020, +27. 2021, +25.
So Craig, could you get to the question? I'm conscious... I understand, 'cause I know you've asked it before, and I'm gonna give you a similar answer than before, but I will update you on a few things we've done. But as particular question, or is it-
Well, will you-
General discussion?
Will you remove Net Promoter Score from being the main one? Put it, put it lower down the rankings and include things like customer complaints, number of referrals to AFCA. I can come up with a host of them.
Yeah.
It's not just me that thinks it. Professor Sheedy from Macquarie University says the same thing, how it's gamed.
Look, I understand all your points, and we have been listening to you, and I'll talk a bit in a minute about what we've done. But in terms of Net Promoter Score, I disagree that it can be gamed at a systematic level across many years, and that's if you have a look at what we're doing, we're measuring relative to our competitors, how much more are we? And we need to be 20 basis points more. You'll say, "That doesn't matter, 'cause I don't like the measure." It is the best measure we can find to measure the overall voice of the customer and what they're telling us.
What we have done is in our short-term incentive plan, we have introduced four or five metrics, and I might get Vicki to talk about them, which go into specific aspects of customer, where we're actually looking at ease of use and other things to make sure that we have some countermeasures to the overall voice of the customer measure. So we will keep NPS there 'cause it's the best one we can find, but we've supplemented it in our STI plan. And Vicki, do you want to talk about that?
Yeah. Thank you. Thank you, Chair. And thank you for the question. In considering the customer metrics, we have actually—we're not just relying on NPS. For the short-term incentive, we're measuring a range of other metrics around ease of how customers find us, from an ease of doing business with us, from an advocacy perspective, from a responsiveness perspective. And I mentioned actually when I spoke earlier, that some of those measures have not been met, and so the STI did not pay out on those measures. The point you raised around complaints is a good one as well, and so we are now incorporating all of our complaints data as we make an assessment around customer experience more broadly and its implications for our REM.
So I think your, your point around ensuring that we're taking a holistic view and looking at what might be considered some contra indicators is well made, and we are doing that. But as Jackie said, we still think that our relative performance in NPS to our competitors and to particularly to the majors, is a place that we want to remain, to have a stretch target in place. And we think that that plus 20 points is a stretch target. It, it's becoming increasingly difficult for us to maintain that gap. But thank you for the question.
Any other questions? Sorry, Robert, I think I talked over you. Online or any other questions?
There are no further questions, Jacqui, for this section.
Okay, thank you. The direct voting and proxy details received prior to the meeting are now-
Jackie-
-being displayed for your information. They are 90.18% in favor, 7.31% against, and 2.51% open votes. So, again, please vote if you haven't already. Moving now on to item four.... We're asking shareholders to consider, and if thought fit, to pass an ordinary resolution for approval of the grant of 122,641 performance rights to the Chief Executive Officer and Managing Director, Marnie Baker, as her long-term incentive for the financial year ended 30 June 2024. This is under the bank's Omnibus Equity Plan and on the terms summarized in the explanatory note to this Notice of Meeting. These performance rights are an incentive plan that create alignment between the managing director and other executives, REM and shareholder outcomes.
The performance rights only vest to the Managing Director if the bank meets its key strategic objectives, so these allocations are very aligned to shareholder outcomes. They're consistent with market practice for ASX-listed companies and financial institutions and are required to compete for the skills we need to manage the bank. Robert, are there any online or pre-submitted questions?
No, Jacqui.
Colin, any questions from the audience?
No, Jacqui.
Thank you. Then, if there are no questions, we'll confirm—I confirm that the non-executive directors of the board unanimously recommend that shareholders vote, vote in favor of this resolution. The direct voting and proxy details received prior to the meeting are now being displayed for your information, and again, I'll read them out for those listening. 93.1% in favor, 4.43% against, and 2.47% open votes. Now, before I proceed to the final matter, please note that voting will close at the end of this meeting, so do please submit your votes now, if you haven't already done so. The final matter to cover is items 5A and 5B in today's agenda, and we're asking shareholders to consider, and if thought fit, to pass the following as special resolutions.
And there's 5A, that the terms and conditions of the selective capital reduction in respect of the CPS4 on the optional exchange date of the 13th of June, 2024, on the terms and conditions described in the explanatory notes accompanying the Notice of Meeting, which is called the First Capital Reduction Scheme, be approved. And 5B is that the terms and conditions of the selective capital reduction in respect of CPS4 at any time prior to the optional exchange date of the 13th of June, 2024, on the terms and conditions described in the explanatory notes accompanying the Notice of Meeting, which is called the Second Capital Reduction, be approved. Robert, are there any pre-submitted or online questions?
No, Jacqui.
Colin, are there any questions in the audience?
There is a question from Craig Caulfield.
Just a brief question to say, I'm sure that no one in the room here really understands what that resolution's about, and I'm not here to vote against it, for it, or make any comments, but it's very hard to understand.
Yeah. So I'm reading...
Thank you.
I'm conscious we're at the end of the meeting. I'm reading out what was explained in our Notice of Meeting. And just to give you the respect to explain it very quickly, converting preference shares are a way in which the bank can gain access to capital, and obviously, capital is an important part of what we need to do. There are particular rules guided by ASIC and APRA in terms of how we manage those rules, and this Notice of Meeting is just to allow us the flexibility to manage it. It needs to be signed off by APRA.
It needs to be signed off by the board, but it allows us the flexibility to do it at a time which is appropriate to do it, in terms of, making sure our capital is, solid and secure from on behalf of the bank. And so it's quite technical. It's quite governed by rules. I can assure you that there's a lot of sign-offs before we get there, but I recognize it's a... I'm racing through a very complex question, but hopefully, people who are interested had a chance to look at it beforehand. So if there's no further, questions, then the direct voting and proxy details received prior to the meeting are now being displayed for your information. For those listening, these details are 69.91% in favor of 5A, 8.4% against, and 21.69% open.
In 5B, 69.57% favor, 8.52% against, and 21.9% open. Probably recognizes the amount of open that people weren't sure what they were voting on. So it is, very standard. We do have to bring it to the AGM. It's not our choice to confuse people. It is what we have to do, but it's a very technical capital-raising activity. But thank you for that, and the board will vote in line with, with, the four resolutions, so they will pass as well. Robert, are there any other questions that we have not yet covered? 'Cause I'm, I'm sure people are ready to, come and join us for a cup of tea soon.
Yes, Jacqui, there are four more pre-submitted questions. The next question comes from a shareholder, name not provided, who asks: "What is the Bendigo Bank's affiliation with the World Economic Forum, and what position does Bendigo Bank Board take on the view of WEF and its policies?
We have no affiliation with the World Economic Forum. We keep a watch in development, but it's things that are relevant to the bank, but no affiliation. Next one.
Your next question comes from shareholder Philippa Fletcher, who asks: "What is the carbon cost, CO2 emissions, of internet created by Google and other carriers without use of carbon credits for all internet transactions made by banks and banking clients interacting with bank?
So, at your bank, we calculate and report on these emissions, quite clearly. You'll see them in our sustainability report. There's a number of data fact pages. So you can get all the information there, but we report on devices, data centers, services provided by our internet companies. It's all in our sustainability report, and I would refer you there for full information.
... Jackie, the next question comes from shareholder David Mickle, who asks: How do you see Bendigo Bank as different from the Big Four? I recently tried to get insurance from Bendigo, and it was very expensive compared to RAC, QBE, and SGIO.
Look, as you may know, covering this quickly, we provide our insurance products, which is under our brand, but it's supplied by our partners, IAG. So they're an organization with significant resources to manage insurance. We understand and recognize premiums are on the rise, we all understand for what reasons. But we, whilst we, of course, look at our, who our partner is, we do sell IAG insurance under the Bendigo Bank brand, Bendigo Bank brand. And so that's, you know, we are offering a insurance service that I recognize is increasing as many other things are. And I'm sorry you didn't find it the best for you when you were looking. Robert?
Your last question, Jacqui, comes from Henry Morgan, who asks: Will the bank close if Bitcoin comes in?
Well, that's a good one for me to end on. No. So Bitcoin's already here. I talked a bit about cryptocurrencies earlier. Decentralized finance is evolving really rapidly. It's extremely volatile, has a range of things that capture media's attention, and there are some very good aspects to it, but it equally warrants quite a lot of caution. I think the Australian Banking Association showed that, I might have said this earlier, that close to 50% of scams were sent to accounts associated with cryptocurrency exchanges, so that's the caution. But I can assure you that banking and well-managed banking under prudential regulations, managed by our regulators, will continue to be of, continue to exist and to be of importance to many communities around Australia. So thank you for all those questions.
The only thing that we need to do now is for me to give David Foster a chance to have a say. Before I do that, I just want to formally recognize that this concludes the items of business for today's meetings. Voting will close imminently, so if you haven't already done so, please submit your votes now. I would like to introduce David Foster, as your incoming chair, to say a few words. I will need to close the meeting, so I'll pop back up and close it in one second, after he has a chance to say something. As he comes up to the stage, he's a highly experienced ex-banker, non-executive director. His most recent role was CEO of Suncorp Bank, which he finished in 2013.
We're very fortunate to have his experience and talent, leading the board, and at risk of repeating myself, I'm very pleased he'll be your new chair. So David, over to you.
Thanks very much, Jackie, and good afternoon, everybody. For those that may be joining us on telephone or those visually impaired, I'm about average height, sadly graying, light brown hair, dark blue suit, and a light blue, blue shirt. I want to say how proud and grateful I am to have the opportunity to lead this terrific and great organization. Bendigo and Adelaide Bank plays a very important role in Australia as a source of competition for the major banks and both as an employer of regional people and a champion of regional communities. As your new chair, I look forward to upholding the values and traditions that have made this a 165-year-old institution so special, such as its strong focus on customer service and its purpose of feeding into the prosperity of its customers and the community.
I'm also committed to continuing the work that has paved the way for our bigger, stronger, and better bank, and it's pleasing to observe that while the bank has undergone significant change in recent years, it remains true to its purpose, established all those years ago. I'll work hard to ensure this remains so in the future as we continue the transformation program to ensure an organization that is future fit and able to deliver on our vision to be Australia's bank of choice. Finally, I want to offer my sincere thanks to Jackie, who's been a terrific chair. The bank's been very fortunate to have Jackie as a chair, given her stature and the integrity that she brings to the role for the last four years, and the board has been grateful for your leadership during a very unusual and challenging period for the bank.
Thank you.
I will now close the voting. The results of the votes will be released to the ASX later today. Thank you very much, everyone, for attending today's meeting, whether that was here in person or online. We thank each and every one of you for your contribution today. Please take care, stay in touch, and I now declare the meeting closed. Thank you.