Bendigo & Adelaide Bank Ltd. · ASX:BEN
Bendigo & Adelaide Bank — Debt Investor Presentation (September 2014)
29 slides from Bendigo & Adelaide Bank's debt investor presentation, Sep 3, 2014
Slide 1: Convertible Preference Shares 2 Offer and SPS Reinvestment Offer
For personal use only Bendigo and Adelaide Bank Convertible Preference Shares 2 Offer and SPS Reinvestment Offer 3 September 2014
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 Convertible Preference Shares 2 (“CPS2”) in Australia (the “Offer”). The Offer is made pursuant to a prospectus under Part 6D.2 of the Corporations Act 2001
Slide 3: CPS2 Offer overview
CPS2 Offer CPS2 • Bendigo and Adelaide Bank (“BEN”) Convertible Preference Shares 2 (“CPS2”) For personal use only Offer size • $200m, with the ability to raise more or less Use of proceeds • The CPS2 will qualify as Additional Tier 1 Capital and the proceeds will be partly used to fund the redempti
Slide 4: SPS Reinvestment Offer
SPS Reinvestment Offer Reinvestment Offer • BEN intends to redeem BEN’s existing Step Up Preference Shares (“SPS”) on 10 October 20141 For personal use only • SPS trade on the ASX under the code “BENPC” Key details • Eligible holders of SPS may elect to have some or all of their SPS redemption proce
Slide 5: Bendigo and Adelaide Bank overview
For personal use only Bendigo and Adelaide Bank overview Bendigo and Adelaide Bank overview 5
Slide 6: Bendigo and Adelaide Bank
Bendigo and Adelaide Bank • A leading Australian regional bank 523 branches For personal use only • More than 90,000 shareholders • Over 5,000 staff 1 4 • Market capitalisation of $5.6bn1 • A multi-brand strategy with four main 51 46 business segments: Retail Banking, Third 3 43 Party Banking, Bendi
Slide 7: Unique and valued customer proposition
Unique and valued customer proposition • Voted one of Australia’s most trusted brands3 For personal use only • Business bank of the year4 for 2011, 2012 & 2013 • Bendigo SmartStart Super® awarded 5 star rating by Canstar • Leading financial institution for customer loyalty 20135 Overview 1. Roy Morg
Slide 8: Consolidation to investment
Consolidation to investment Consolidation Strengthening Investment For personal use only • BEN’s securitisation • BEN buys Australian • Basel II Advanced program used to arm of Bank of Cyprus Accreditation support funding and – later naming it capital Delphi Bank • Industry consolidation • Balance s
Slide 9: Full year results
Full year results Financial performance - statutory profit after tax Financial performance - cash basis earnings For personal use only • Statutory profit after tax $372.3m • Cash earnings of $382.3m • Full year dividend of 64.0¢, fully franked1 • Cash earnings per share 91.5¢ • Final dividend of 33.
Slide 10: Positive earnings momentum
Positive earnings momentum For personal use only Financial performance 10
Slide 11: Flexible funding structure
Flexible funding structure • Leveraging core strengths of the retail brand and network For personal use only • We continue to issue in wholesale markets to achieve diversity, tenor and pricing benefits • RMBS issue in 2H14 • Completed first Swiss Franc senior debt deal Financial overview Note : Term
Slide 12: Retail funding
Retail funding • Management target of 75-80% retail funding maintained For personal use only • Term deposit retention rate consistently above 80% • Growth in at-call deposits • Preparation well underway for Basel III liquidity Financial overview 1. Source: Company data 12
Slide 13: Improved capital position
Improved capital position • Common equity Tier 1 capital For personal use only improved to 8.02%1 • Capital position strengthened through $230m institutional share placement, $150m SPP and $300m Basel III compliant tier 2 sub debt 1 2 Financial overview 1. Shows pro-forma impact to capital adequacy
Slide 14: Basel II advanced accreditation
Basel II advanced accreditation • Model development substantially complete For personal use only across all risk areas • Independent model validation well advanced • Enhanced risk-adjusted performance measures and capital allocation methodologies being rolled-out • Internal estimates reflect low ris
Slide 15: Bad and doubtful debts
Bad and doubtful debts • Retail BDD charge in 2H14 impacted by one large For personal use only exposure • Northern Australia cattle property values stabilised in 2H14 • Improvement in Third Party Lending predominantly due to Great Southern MIS portfolio Financial overview 15
Slide 16: Arrears – days+
Arrears – 90 days+ For personal use only Financial overview 16
Slide 17: Great Southern
Great Southern • BEN has entered into an agreement (subject to court approval) to conclude the class actions brought by For personal use only investors in managed investment schemes operated by Great Southern • BEN’s borrowers who are members of the class actions have admitted that their loans are v
Slide 18: CPS2 Offer
For personal use only CPS2 Offer CPS2 Offer 18
Slide 19: Dividends
Dividends For personal use only Dividends • Dividends on CPS2 are preferred, discretionary, non-cumulative floating rate payments • Dividends on CPS2 are scheduled to be paid semi-annually in arrears subject to certain Dividend Payment Tests • Dividends are expected to be fully franked Dividend Rate
Slide 20: Optional Exchange Date
Optional Exchange Date For personal use only Optional Exchange • BEN may choose to Exchange all or some CPS2 on issue on the Optional Exchange Date which is 30 November 2020 Exchange • Subject to APRA’s prior written approval and provided certain conditions are satisfied, BEN may Exchange CPS2 via:
Slide 21: Mandatory Conversion
Mandatory Conversion For personal use only Mandatory • The Mandatory Conversion Date is 30 November 2022 provided that all of the Mandatory Conversion Conversion Conditions are satisfied • On the Mandatory Conversion Date, Holders will receive approximately $101.011 worth of Ordinary Shares, unless
Slide 22: Capital Trigger Event and Non-Viability Trigger Event
Capital Trigger Event and Non-Viability Trigger Event 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 Bendigo and Adelaide Bank’s Common Equity Tier 1 Capital Ratio or For personal use only Bendigo a
Slide 23: Other early Exchange or Conversion
Other early Exchange or Conversion For personal use only Other early Exchange • BEN may choose to Exchange all or some CPS2 following the occurrence of a Tax Event or a or Conversion Regulatory Event (subject to certain • BEN may choose to Convert all (but not some) CPS2 after an Acquisition Event c
Slide 24: Level 2 Common Equity Tier 1 Capital Ratio
Level 2 Common Equity Tier 1 Capital Ratio For personal use only • Bendigo and Adelaide Bank’s Level 2 Level 2 common equity tier 1 ratio1 Common Equity Tier 1 Capital Ratio as at 30 June 2014 on a Basel III basis was 8.73% 9% 8.73% Balance sheet • Bendigo and Adelaide Bank’s Common strength Equity
Slide 25: Key risks
Key risks1 Key risks associated with investing in CPS2 Not deposit liabilities • CPS2 are not deposit liabilities of Bendigo and Adelaide Bank, are not protected accounts for the For personal use only purposes of the depositor protection provisions under the Banking Act and are not guaranteed by any
Slide 26: Key risks
Key risks1 Key risks associated with investing in CPS2 It is not certain whether • It is uncertain whether and when Exchange may occur and, subject to certain conditions, CPS2 For personal use only and when CPS2 may be may be Converted, Redeemed or Resold on the Optional Exchange Date or early due t
Slide 27: Key dates
Key dates Date for determining Eligible Securityholders 2 September 2014 For personal use only Lodgement of the Prospectus with ASIC 3 September 2014 Bookbuild to determine the Margin 8 September 2014 Announcement of the Margin 8 September 2014 Lodgement of the replacement Prospectus with ASIC 11 Se
Slide 28: Key dates – SPS Holders
Key dates – SPS Holders Record date for determining Eligible SPS Holders for the For personal use only 2 September 2014 Reinvestment Offer Record date for SPS Dividend 24 September 2014 Last day of trading for SPS on ASX 30 September 2014 Closing date for the Reinvestment Offer 5:00pm Melbourne time
Slide 29: Contact details
Contact details Bendigo and Adelaide Bank Arranger and Joint Lead Manager Joint Lead Manager For personal use only Richard Fennell Michael Cluskey Damian Pretty Chief Financial Officer Phone:(03) 9679 1138 Phone:(03) 9631 9801 Phone:(08) 8300 6200 Mobile:0412 888 930 Email: richard.fennell@bendigoad
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