In a provocative deviation from consensus economic forecasts among Australia’s largest financial institutions, Bendigo Bank has staked out a contrarian position, predicting a third Reserve Bank of Australia (RBA) cash rate increase will land in August 2026 rather than the May timeline widely expected by the country’s biggest banks. The unusual forecast comes alongside the regional lender’s strong quarterly profit results that have lifted its stock, even as it cuts hundreds of roles to align with new long-term tech partnerships.
Bendigo Bank’s chief economist David Robertson outlined the forecast in a public statement Tuesday, confirming that the bank joins the broader market in expecting the RBA to hold interest rates steady at its upcoming May monetary policy meeting. But unlike rival national lenders ANZ, Commonwealth Bank of Australia and National Australia Bank, which all project a 25-basis point hike at the May gathering, Robertson said persistent economic pressures tied to global energy market disruptions will force the RBA to act three months later.
The RBA last lifted the cash rate by 25 basis points at its March meeting, pushing the benchmark rate to 4.1% amid ongoing efforts to cool stubbornly high inflation. Robertson noted that the RBA’s May decision will hinge on how policymakers balance the risks of supply-demand imbalances stemming from the ongoing Middle East conflict against the threat of tipping the domestic economy into a technical recession.
The call for a delayed rate hike, Robertson explained, is rooted in two competing forces shaping Australia’s current economic trajectory: a surprisingly resilient domestic labour market that has kept consumer spending steady, and growing inflationary risks spurred by geopolitical tension in the Middle East. With key global shipping chokepoint the Strait of Hormuz facing ongoing disruption amid regional conflict, Bendigo Bank warns that constrained energy supplies and sustained elevated commodity prices will create a domino effect that keeps inflation above the RBA’s 2-3% target range. Robertson added that all global energy shocks carry inherent risk of stagflation, a toxic combination of slow growth and persistent rising prices that would force central bank action.
The interest rate forecast was released alongside a separate major announcement from Bendigo Bank this week, confirming the lender would cut a significant share of its workforce after locking in multi-million-dollar long-term partnership deals with global technology services firms Infosys and Genpact. The partnerships run for seven and six years respectively, with the bank stating the agreements will bring specialized expertise in process optimization and delivery, boost long-term productivity, and strengthen the bank’s enterprise risk management frameworks.
Despite the controversy of workforce cuts, Australian equity markets reacted positively to the bank’s updates. Bendigo Bank ranked among the top-performing stocks on the Australian Securities Exchange following the announcements, climbing 8.41% in intraday trading. The regional lender also delivered better-than-expected financial results for the March quarter, reporting cash profit of $138 million that beat consensus market forecasts by 12%, reinforcing investor confidence in the bank’s strategic shift.