Bendigo & Adelaide Bank Ltd. · ASX:BEN
Bendigo & Adelaide Bank — Investor Presentation (October 2020)
37 slides from Bendigo & Adelaide Bank's investor presentation, Oct 28, 2020
Slide 1: Capital Notes Offer and CPS2 Reinvestment Offer
Capital Notes Offer and CPS2 Reinvestment Offer 28 October 2020 1
Slide 2: Disclaimers
Disclaimers This presentation is dated 28 October 2020 has been prepared by Bendigo and Adelaide Bank Limited ABN 11 068 049 178 ("BEN") in relation to its proposed offer of Capital Notes. A prospectus in respect of the offer of Capital Notes was lodged with ASIC on 28 October 2020 ("Prospectus"). T
Slide 3: Disclaimers
Disclaimers Capital Notes are not deposit liabilities of BEN, are not Protected Accounts of BEN under the Banking Act or any other accounts with BEN and are not guaranteed or insured by any government, government agency or compensation scheme of the Commonwealth of Australia or any other jurisdictio
Slide 4: Capital Notes Offer overview
Capital Notes Offer overview Issuer • Bendigo and Adelaide Bank Limited (ABN 11 068 049 178) (“BEN”) Offer • Fully paid, perpetual, subordinated, unsecured, convertible notes (“Capital Notes”), with an issue price of $100 per Capital Note Offer size • $350 million with the ability to raise more or l
Slide 5: CPS2 Reinvestment Offer
CPS2 Reinvestment Offer CPS2 • CPS2 are convertible preference shares issued by BEN in 2014 and trade on ASX under the code “BENPE” Reinvestment • Eligible holders of CPS2 have the opportunity to reinvest their CPS2 in Capital Notes Offer Key details • On 28 October 2020, BEN issued an exchange noti
Slide 6: Bendigo and Adelaide Bank Overview
Bendigo and Adelaide Bank Overview 6
Slide 7: Bendigo and Adelaide Bank
Bendigoand > AdelaideBank Bendigoand AdelaideBank 7 >
Slide 8: We are well placed
Banking We are well placed # 2 B “Up winner of Fintech 9th most trusted brand Excellence in Industry Collaborations & Partnerships in Australia* Roy Morgan Net Trust Bendigo and Adelaide Bank and Ferocia Forrester’s Australian Customer CG. Mozo’s Experts ." Choice Award ° Winner 2020 1st Excellent B
Slide 9: Physical locations
Physical locations PHYSICAL LOCATIONS 3) co Company-owned branch 154 Community Bank® branch 321 if) Delphi Bank >> 4 Rural Bank A Alliance Bank Private Franchises >| BendigoandAdelaideBank,
Slide 10: FY20 financial result
FY20 financial result Pre-COVID-19 impacts earnings broadly stable FY20 FY19 FY20 vs FY20 net profit ($m) ($m) FY19 impacted by1 Statutory net profit $192.8 $376.8 (48.8%) • COVID-19 collective Cash earnings $301.7 $415.7 (27.4%) provision overlay of $127.7m Cash earnings (ex COVID-19 impacts)2 $403
Slide 11: Net interest margin
Net interest margin Historical NIM (%) 2.35 2.37 2.37 2.36 2.33 2.29 • FY20 NIM contracted by 3bps to 2.33% 0.40 0.40 0.38 0.40 0.37 0.36 • Ongoing active management of price/volume balance – lending and term deposits • Lending portfolio rate continues to drive lower due to mix of growth 1.95 1.97 1
Slide 12: Funding mix
Funding mix • Funding mix continues to be a strength, allowing flexibility to Funding profile (%) fund asset growth and manage margin 5.4 5.9 5.2 • Despite RBA cash rate reductions, group call deposit portfolio 19.6 19.7 19.6 has increased ~$3.0b during 2H20, replacing higher cost term deposits 37.2
Slide 13: Capital
13.75% Capital 13.14% 2.02% +0.14% 13.61% 12.85% • Balance sheet strength 12.21% 12.46% +0.14% • 33bps increase in Common Equity Tier 1 (“CET1”) since June 2.34% 11.59% 2019 to 9.25% • Target CET1 range of 9.0% – 9.5% remains and will be reviewed 9.25% 9.25% after APRA finalises its review of the ca
Slide 14: Capital
Capital 1 CET1 peer comparison 2H20 1H20 2H19 1H19 (%) (%) (%) (%) 11.4% 10.8% 10.8% 10.7% Common Equity Tier 1 9.25% 9.00% 8.92% 8.76% 9.8% 9.3% 9.0% Additional Tier 1 2.40% 2.40% 2.39% 2.39% Major 1 Major 2 Major 3 Major 4 Regional 1 BEN Regional 2 Tier 1 11.59% 11.40% 11.31% 11.15% 2 S&P Risk Adj
Slide 15: Residential lending portfolio
Residential lending portfolio 2 Retail1 - portfolio ($b) Exposure by state 23.5 23.1 22.8 22.4 22.3 21.7 21.2 15% Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 9% 10% 2 TPB3 - portfolio ($b) 19.9 26% 18.0 16.8 38% 16.3 16.1 15.6 15.8 2% Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 1 Retail re
Slide 16: Residential lending portfolio key metrics
Residential lending portfolio key metrics 1 Home Loans 90+ days past due - by state Residential portfolio and settlement metrics3 Jun-20 Dec-19 3.0% Retail mortgages 54% 56% Third Party mortgages 46% 44% 2.0% Lo Doc 1% 1% 1.0% Owner occupied 64% 63% Owner occupied P&I 90% 89% 0.0% Owner occupied I/O
Slide 17: Business division segments
Business division segments Business division – CRE1 portfolio • Small business proposition continues to build on prior period momentum, as a clear differentiator within the market, 26.5% 26.6% 26.7% 27.3% 27.6% 28.0% 28.0% 28.4% 28.6% 28.7% 28.9% 29.4% 29.4% achieving growth over the financial year
Slide 18: Agribusiness portfolio
Agribusiness portfolio Agri exposure by industry Exposure by state 3.9% 4.7% Grain/Sheep/Beef 7.7% Sheep/Beef 32.6% Grain 8.1% Beef Dairy 13.5% Sheep Other 9% 15.0% Hort./Vit. 14.5% 19% 16% Agribusiness portfolio ($) 19% 6.1 6.0 5.9 5.8 5.7 5.6 34% 5.4 3% Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Ju
Slide 19: Bad and doubtful debts
Bad and doubtful debts 2H20 1H20 2H19 1H19 • FY20 BDD charge excluding COVID-19 overlay was 8bps of gross ($m) ($m) ($m) ($m) loans, with COVID-19 collective provision overlay contributing a Consumer division ($3.5) ($0.4) $13.0 $5.7 further 18bps (total 26bps of Gross Lending Assets) • COVID-19 col
Slide 20: Arrears
Arrears Arrears collection activities 1 temporarily suspended with Commercial loan arrears Residential loan arrears resources redirected to assist customers $8.5b 1.6% 4.0% 1.2% 3.0% $6.5b 2.0% 0.8% 1.0% 0.4% 0.0% $4.5b 0.0% Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Portf
Slide 21: Capital Notes Offer
Capital Notes Offer >| Bendigoand AdelaideBank.
Slide 22: Distributions
Distributions • Distributions on Capital Notes are discretionary, non-cumulative floating rate payments and are subject to certain Distribution Payment Conditions Distributions • Holders are expected to receive Distributions which have been fully franked – if any Distribution payment is not fully fr
Slide 23: Summary of events that may affect Capital Notes
Summary of events that may affect Capital Notes Issue Date 30 Call Date Mandatory Exchange Date Potentially November 2020 perpetual Each Distribution Payment Date after 15 June 2027 15 June 2029 15 June 2029 If the Mandatory Exchange Conditions If Exchange does not occur on 15 June If BEN chooses, a
Slide 24: Call Date and Optional Exchange Date
Call Date and Optional Exchange Date • The Call Date is 15 June 2027 Call Date • BEN may elect to Exchange, Redeem or Resell Capital Notes (subject to APRA’s prior written approval) • BEN may choose to Exchange, Redeem or Resell all or some Capital Notes (subject to APRA’s prior written Optional Exc
Slide 25: Mandatory Exchange
Mandatory Exchange • On 15 June 2029, subject to the satisfaction of the Mandatory Exchange Conditions illustrated below, Capital Notes will Mandatorily Exchange, unless previously Exchanged, Redeemed or Resold. The Exchange Calculations are designed to ensure that the Holders receive approximately
Slide 26: Exchange on a Capital Trigger Event or Non-Viability Trigger Event
Exchange on a Capital Trigger Event or Non-Viability Trigger Event • A Capital Trigger Event occurs when BEN determines, or APRA notifies BEN in writing that it believes, that Capital Trigger Event either or both of the BEN Level 1 Common Equity Tier 1 Capital Ratio or the BEN Level 2 Common Equity
Slide 27: Ranking of Capital Notes in a winding-up
Ranking of Capital Notes in a winding-up Type Illustrative examples • Liabilities in Australia in relation to protected accounts • Preferred and secured debt (generally, savings accounts and term deposits) and other Higher ranking liabilities preferred by law including employee entitlements and secu
Slide 28: Key risks associated with an investment in Capital Notes
Key risks associated with an investment in Capital Notes1 Not deposit liabilities ● Capital Notes are not deposit liabilities of BEN or any member of the BEN Group, are not protected accounts for the purposes of the depositor protection provisions under the Banking Act and are not guaranteed by any
Slide 29: Key risks associated with an investment in Capital Notes
Key risks associated with an investment in Capital Notes1 It is not certain whether and ● It is uncertain whether and when Exchange may occur and, subject to certain conditions, Capital Notes may be when Capital Notes may be Exchanged, Redeemed or Resold on the Call Date or following the occurrence
Slide 30: Key risks associated with an investment in Capital Notes
Key risks associated with an investment in Capital Notes1 Restrictions in a winding-up ● If there is a shortfall of funds on a winding-up of BEN to pay all amounts ranking senior to and equally with Capital Notes, of BEN Holders will lose all or some of their investment Substitution of BEN for a ● B
Slide 31: Key dates for the Offer
Key dates for the Offer Key dates for the Offer Record Date for Securityholder Offer 22 October 2020 Lodgement of Prospectus with ASIC and ASX 28 October 2020 Bookbuild to determine the Margin 4 November 2020 Announcement of the Margin 4 November 2020 Lodgement of Replacement Prospectus with ASIC an
Slide 32: Key dates for the Offer
Key dates for the Offer Key dates for Capital Notes First Distribution Payment Date 15 March 2021 Call Date 15 June 2027 Mandatory Exchange Date 15 June 2029 Key dates for CPS2 holders Record date for determining Eligible CPS2 Holders for the Reinvestment Offer 22 October 2020 Last day of trading fo
Slide 33: Appendix
Appendix >| Bendigoand AdelaideBank
Slide 34: Support packages through COVID-19
Support packages through COVID-19 (as at 16 October) Support packages through COVID-19 (by #) Support packages through COVID-19 (by $) ~74% reduction since peak 4.5b 4.5b 13,641 4.2b 13,521 4.2b 12,840 12,493 3.7b 10,995 ~49% reduction since peak 2.0b 2.0b 1.9b 1.9b ~75% reduction 1.8b 1.7b since pe
Slide 35: Supporting our customers through COVID-19
Supporting our customers through COVID-19 (as at 30 September) Total accounts assisted 25,066 Residential & consumer support packages - by state Total balance assisted $7.7b Accounts active 8,746 Balance active $3.5b 15% 10% 5% Residential & consumer support packages Commercial support packages 1 (a
Slide 36: COVID-19 in Victoria – detail
COVID-19 in Victoria – detail (as at 30 September) Accounts active 4,476 Balance active $1.8b Metropolitan Victoria Regional Victoria Residential & consumer support 1 Residential & consumer support 1 Commercial support packages (active) Commercial support packages (active) packages (active) packages
Slide 37: Issuer, Arranger and Joint Lead Managers
Issuer Arranger and Joint Lead Managers Peter Ormandy National Australia Bank Group Treasury Nicholas Chaplin +61 2 9237 9518 T: +61 8 7109 9501 Stefan Visser +61 2 9237 9505 M: +61 419 811 134 E: peter.ormandy@bendigoadelaide.com.au Ord Minnett Limited Robert Thomson +61 3 9608 4134 Mark McKay Kyle
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