Bendigo and Adelaide Bank shares have taken a dive after a 2.4 per cent dip in first-half profit, but the regionally focused lender hopes to benefit from the big four's public relations disaster at the royal commission.

In revealing a flat $219.8 million first-half cash earnings result on Monday, Bendigo Bank managing director Marnie Baker told investors that an "uneven playing field" in the banking industry had not only inhibited the growth of smaller lenders but also served as a catalyst for the wrongdoing uncovered at the financial services inquiry.

"Trust in the banking sector was and is still at an all-time low," Ms Baker said.

Read Next "We know consumers are looking for an alternative, and as an organisation that puts the interests of customers first, we are well-placed, given the strength of our product offering, our market leading customer service and our price competitiveness to be that for them."

Subdued earnings knocked the bank's share price down by as much as five per cent in early trade on Monday, with first half statutory profit also taking a hit, down 12.3 per cent to $203.2 million.

Ms Baker pointed to tighter lending standards, as well as diminishing margins and increased costs due to tougher regulatory conditions for the decrease.

Net interest income for the half decreased $11.5 million to $656.5 million, while expenses increased by $18.7 million or 4.2 per cent on salary increases, and an increase in legal costs and software licence fees.

Ms Baker said Kenneth Hayne had made strong recommendations on how to better deliver for customers, and added there was considerable scope for government to supplement the final report.

"(But) we do need to watch out for the unintended consequences on the availability of credit, and demand leaking into the unregulated sector," she said.

Ms Baker said any changes from the Royal Commission would likely be procedural and policy related rather than structural.

Shares in Bendigo and Adelaide Bank were trading 5.11 per cent lower at $10.58 at 1120 AEDT on Monday, down from $11 a year ago.

The bank announced a fully franked interim dividend of 35 cents per share, in line with the prior period.

BENDIGO BANKING ON TRUST

* First-half cash earnings down 2.4pct to $219m

* Net interest income down $11.5m to $656.5m

* Statutory profit down 12.3pct to $203.2m

* Interim dividend unchanged at 35 cents per share, fully franked