It has revealed it wants to buy Melbourne firm Ferocia, which helped it set up the successful Up app in 2018.

The app targets people aged 18 to 35 years old and tries to "take them from a place where money is a cause of stress and anxiety to a happier place".

More: Bendigo Bank profits surge in pandemic year

The app is now "winning customers from the big four banks at speed", managing director Marnie Baker told shareholders on Monday morning.

"Up was originally an experiment to see if we could reimagine banking for a new generation of customers with a fresh approach," she said.

"When we launched Up in 2018 we set out to disrupt the industry by building a completely different experience through a technology-led banking, not bank-led technology approach.

"It's rapid growth has far exceeded all expectations."

Up has now won a slew of industry awards and is getting 60 per cent of its business through referrals, the bank said.

"The time is right to scale up," Ms Baker said.

More news: Victoria records 22 new cases of COVID-19 in last 24 hours

Under the buyout plan, Ferocia would become a division of the bank.

It would have the same management and customer base but would also use its expertise to improve other areas of the bank's business.

The deal would be worth up to $116 million, subject to five year earnout hurdles, by issue of new Bendigo and Adelaide Bank shares.

It should be finalised later this year, the bank told shareholders on Monday morning.

The bank has told investors the purchase will help it digitise services with a group that is already helping it increase its customer base through online platforms.

The Ferocia announcement was made as the bank announced surging profits over the 2020/21 financial year, with cautious optimism for Australia's economic rebuild from COVID-19.

Our journalists work hard to provide local, up-to-date news to the community. This is how you can access our trusted content: