Bendigo & Adelaide Bank Ltd. · ASX:BEN
Bendigo & Adelaide Bank — Investor Presentation (October 2017)
30 slides from Bendigo & Adelaide Bank's investor presentation, Oct 16, 2017
Slide 1: Converting Preference Shares 4 Offer and CPS Reinvestment Offer
For personal use only Converting Preference Shares 4 Offer and CPS Reinvestment Offer 16 October 2017
Slide 2: Important notice
This presentation has been prepared by Bendigo and Adelaide Bank Limited (ABN 11 068 049 178, AFSL 237879) (“BEN”) in relation to the offer of Converting Preference Shares 4 (“CPS4”) (the “Offer”). The Offer is made pursuant to a prospectus under Part 6D.2 of the Corporations Act 2001 (Cth) which wa
Slide 3: CPS4 Offer overview
CPS4 Offer overview Offer ● Offer by Bendigo and Adelaide Bank Limited (“BEN”) of BEN Converting Preference Shares 4 (“CPS4”) For personal use only Offer size ● $300m (including the Reinvestment Offer), with the ability to raise more or less Purpose ● The CPS4 will qualify as Additional Tier 1 Capit
Slide 4: CPS Reinvestment Offer
CPS Reinvestment Offer For personal use only Reinvestment Offer ● BEN has given an exchange notice to redeem its existing CPS on 13 December 2017 ● CPS trade on the ASX under the code “BENPD” Key Details ● Eligible holders of CPS may elect to have some or all of their CPS redemption proceeds (i.e. $
Slide 5: Bendigo and Adelaide Bank Overview
For personal use only Bendigo and Adelaide Bank Overview 5
Slide 6: A complete portfolio of businesses
A complete portfolio of businesses For personal use only Brand Segment Business Provides a full range of consumer and business banking Local Connection products and solutions Partner Connection Third party banking, wealth and protection solutions Agribusiness Solutions for agricultural farm business
Slide 7: Bendigo and Adelaide Bank branches
Bendigo and Adelaide Bank 544 branches For personal use only Australia’s fifth-largest retail bank 1 4 More than 90,000 shareholders 44 52 Over 7,000 staff (including Community 4 43 1 Bank® staff) 1 2 24 14 Market capitalisation of ~$5.5bn1 16 51 16 A multi-brand strategy with three main 8
Slide 8: Most customer connected bank
Most customer connected bank Rated Top For personal use only Bank in 6 out 2017 of 8 Victorian Categories - #1 in Forrester’s Corporate Mozo People’s Choice Citizen of Awards1 Australian Customer the Year2 Experience Index3 Leveraged Equities5 CANSTAR Innovation - Highest Overall Stockbroker Satis
Slide 9: Our full year 2017 result
Our full year 2017 result Financial performance For personal use only Statutory profit after tax $429.6m Net interest margin down 1bp to 2.22% year on year Cash earnings of $418.3m Net interest margin up 8bps to 2.26% half on half Cash earnings per share 88.5¢ Cost to income down 2%2 to
Slide 10: Flexible funding position
Flexible funding position For personal use only Funding continues to be a strength providing flexibility for organic and inorganic asset growth Retail deposits up 4.7% in FY17 LCR of 122% at 30 June 2017 Indicative NSFR ~110% Increased activity by BEN in RMBS market in 2H17 Note - Reclassi
Slide 11: Strong CET1 organic growth in 2H17
Strong CET1 organic growth in 2H17 For personal use only Organic capital growth reflecting slower loan growth and increased RMBS activity in 2H17 Will achieve unquestionably strong through organic capital generation and DRP participation S&P Risk Adjusted Capital (RAC) comparisons are promisin
Slide 12: Key capital ratios & residential LVR breakdown
Key capital ratios & residential LVR breakdown For personal use only Jun-17 Key regulatory capital ratios (%)1 1H16 2H16 1H17 2H17 Common equity tier 1 8.24 8.09 7.97 8.27 Additional tier 1 2.44 2.31 2.20 2.22 Tier 1 Capital 10.68 10.40 10.17 10.49 Tier 2 1.98 1.81 2.03 1.97 Total regulatory capital
Slide 13: Housing lending growth
Housing lending growth Strong growth across Retail channel 10% Investor For personal use only growth limit 2H17 growth has slowed as BEN aligns with new APRA limits Investor credit growth sub 10% Interest only flows reducing following price changes Will achieve sub 30% interest only flows
Slide 14: Bad and doubtful debts
Bad and doubtful debts BDD charge 12 basis points of gross loans, 8 basis points excluding Great Southern For personal use only Lower BDD charge in 2H17 driven by Great Southern and business banking improved credit outcome Impaired assets reduced by 19% year on year Specific provision lower
Slide 15: Arrears remain benign
Arrears remain benign For personal use only 1 Note - Data excludes commercial arrangement loans 1. Keystart included from Jun-17 15
Slide 16: CPS4 Offer
For personal use only CPS4 Offer 16
Slide 17: Key terms - Dividends
Key terms - Dividends Dividends ● Dividends on CPS4 are preferred, discretionary, non-cumulative floating rate payments ● Dividends on CPS4 are scheduled to be paid quarterly in arrears subject to the Dividend Payment Tests For personal use only ● Dividends are expected to be fully franked Dividend
Slide 18: Ranking of Converting Preference Shares in a winding-up
Ranking of Converting Preference Shares 4 in a winding-up2 For personal use only Type Illustrative examples Higher ranking Liabilities in Australia in relation to protected accounts (generally, savings accounts and term deposits) and Preferred and secured debt other liabilities preferred by law incl
Slide 19: Key terms – Optional Exchange
Key terms – Optional Exchange For personal use only Optional Exchange ● BEN may elect to Exchange all or some CPS4 on issue on the Optional Exchange Date which is 13 June 2024 Exchange ● Subject to APRA’s prior written approval and provided certain conditions are satisfied, BEN may Exchange CPS4 via
Slide 20: Key terms – Mandatory Conversion
Key terms – Mandatory Conversion For personal use only Mandatory Conversion ● The Mandatory Conversion Date is 15 June 2026 provided that all of the Mandatory Conversion Conditions are satisfied on that date ● On the Mandatory Conversion Date, Holders will receive approximately $101.011 per CPS4 wor
Slide 21: Key terms - Capital Trigger Event and Non-Viability Trigger Event
Key terms - Capital Trigger Event and Non-Viability Trigger Event For personal use only Capital Trigger Event ● A Capital Trigger Event occurs when BEN determines, or APRA notifies BEN in writing that it believes that either or both of BEN’s Common Equity Tier 1 Capital Ratio or the BEN Group’s Comm
Slide 22: Key terms - Other early Exchange or Conversion
Key terms - Other early Exchange or Conversion For personal use only Other early Exchange or ● BEN may elect to Exchange all or some CPS4 following the occurrence of a Tax Event or a Regulatory Event Conversion (subject to ● BEN may elect to Convert all (but not some) CPS4 following the occurrence o
Slide 23: Summary of events that may affect the Converting Preference Shares 4
Summary of events that may affect the Converting Preference Shares 4 Issue Date Potentially Optional Exchange Date Mandatory Conversion Date 13 Dec 2017 Perpetual For personal use only Each Dividend 13 June 2024 15 June 2026 Payment Date after 15 June 2026 If BEN chooses, and If the Mandatory If the
Slide 24: Level 2 Common Equity Tier 1 Capital Ratio
Level 2 Common Equity Tier 1 Capital Ratio For personal use only Level 2 Common Equity Tier 1 ratio1 Balance sheet ● BEN’s Level 2 Common Equity Tier 1 strength Capital Ratio as at 30 June 2017 on a Basel III basis was 8.27% Capital buffers ● $1,1983 million of Common Equity Tier 1 Capital above the
Slide 25: Key risks
Key risks1 Key risks associated with investing in CPS4 Not deposit liabilities ● CPS4 are not deposit liabilities of BEN or any member of the BEN Group, are not protected accounts for the For personal use only purposes of the depositor protection provisions under the Banking Act and are not guarante
Slide 26: Key risks
Key risks1 Key risks associated with investing in CPS4 It is not certain whether ● It is uncertain whether and when Exchange may occur and, subject to certain conditions, CPS4 may be For personal use only and when CPS4 may be Converted, Redeemed or Resold on the Optional Exchange Date or early due t
Slide 27: Key risks
Key risks1 Key risks associated with investing in CPS4 Restrictions in a winding- ● If there is a shortfall of funds on a winding-up of BEN to pay all amounts ranking senior to and equally with For personal use only up of BEN CPS4, Holders will lose all or some of their investment Implications of an
Slide 28: Key dates
Key dates For personal use only Date for determining Eligible Securityholders 7:00pm, Thursday, 12 October 2017 Lodgement of Prospectus with ASIC Monday, 16 October 2017 Bookbuild to determine the Margin Monday, 23 October 2017 Announcement of the Margin Monday, 23 October 2017 Lodgement of the repl
Slide 29: Key dates for CPS holders
Key dates for CPS holders For personal use only Record date for determining Eligible CPS Holders for the Reinvestment Offer Thursday, 12 October 2017 Last day of trading for CPS on ASX Friday, 24 November 2017 Record date for CPS Dividend Tuesday, 28 November 2017 Closing date for the Reinvestment O
Slide 30: Contact details
Contact details Issuer Arranger and Joint Lead Manager For personal use only Allan O’Sullivan Peter Ormandy Phone: (02) 8254 1425 Group Treasurer Ryan Evans Phone:(08) 7109 9501 Phone: (02) 8254 4694 Mobile: 0419 811 134 Email: peter.ormandy@bendigoadelaide.com.au Joint Lead Manager Mark McKay Head
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