The Bendigo and Adelaide Bank has reported a 43 per cent fall in its annual statutory profit.
The regional lender made a net profit after tax of $195 million last financial year, amid high funding costs and slowing credit demand.
The bank's preferred cash profit measure, which excludes one-off costs and gains, was down a more modest 3.9 per cent to $323 million.
Managing Director Mike Hirst says the outlook for the current financial year is uncertain, given market volatility and the eurozone's debt problems.
"There's no doubt it's been a very challenging 12 months for banks generally, with the issues in Europe meaning that competition for deposits has been particularly strong since September," he observed.
"That was compounded as the RBA eased monetary policy." Mr Hirst says the bank has engaged in a hedging program which, while expensive, successfully mitigated the risk of volatility in the banks margins.
However, he says it remains difficult to forecast next year's results given the volatile global financial environment.
The bank's board announced a fully-franked 30 cent final dividend, which is at the same level as the previous interim payout.