Bendigo & Adelaide Bank Ltd. · ASX:BEN
Bendigo & Adelaide Bank — Merger or Acquisition (August 2007)
24 slides from Bendigo & Adelaide Bank's merger presentation, Aug 9, 2007
Slide 1: Merger of Adelaide Bank and Bendigo Bank
For personal use only Merger of Adelaide Bank and Bendigo Bank 1
Slide 2: Agenda
[Adele Lloyd] For personal use only Agenda 1. Introduction – Adele Lloyd 2. Strategic Rationale – Robert Johanson 3. The Combined Group – Rob Hunt and Jamie McPhee 4. Synergies – Jamie McPhee 5. Process and Timing – Robert Johanson 2
Slide 3: Details of Merger
Details of Merger [Robert Johanson] For personal use only Both Boards unanimously recommend the merger Proposal Merger of Adelaide Bank Ltd (Adelaide) and Bendigo Bank Ltd (Bendigo) Scrip for scrip merger via Adelaide scheme of arrangement - subject to Adelaide shareholder approval Exchange Rati
Slide 4: Strategic Rationale
Strategic Rationale [Robert Johanson] For personal use only n Bendigo and Adelaide are the right partners f Merger combines two successful companies to create a unique customer and partner focused financial services organisation f Strong cultural alignment o Combination of two distinctive but comple
Slide 5: Strategic Rationale
Strategic Rationale [Robert Johanson] For personal use only q Merged group is financially stronger and better positioned to grow and innovate. f Expanded national presence in every State and Territory in Australia f Improved scale/operating efficiency (cost-income) f Enlarged balance sheet f Diversi
Slide 6: Summary of Adelaide Results
Summary of Adelaide Results [Jamie McPhee] For personal use only Results Summary Drivers 2007 2006 Change Strong business growth and diversified earnings Reported 105.6 94.4 11.9% NPAT ($m) Sound and improving asset quality Cash Earnings Return to double-digit EPS growth 104.3 94.0 10.9% 2007-
Slide 7: Summary of Bendigo Results
Summary of Bendigo Results [Rob Hunt] For personal use only Results Summary Drivers 2007 2006 Change Continued progress reflects consistent focus and investment Reported 121.8 116.7 4.4% NPAT ($m) Substantial improvement in Cash ROE – up 0.9% to 15.4% Cash Earnings 118.5 102.5 15.6% Exceeded c
Slide 8: Bendigo and Adelaide are the Right Partners
[Rob Hunt and Jamie McPhee] Bendigo and Adelaide are the Right Partners For personal use only Merger based on partnership approach Alignment of culture is key Complementary businesses, channels, products, and capabilities Revenue diversification and geographic extension rather than overlap
Slide 9: Combination of Complementary Businesses
[Rob Hunt and Jamie McPhee] Combination of Complementary Businesses For personal use only Leveraging the strengths of both companies Competitive Bendigo Adelaide Advantages Capabilities Capabilities of Merged Group Service Strong customer service Leading partner service Leading customer servic
Slide 10: Enhanced Proposition for All Stakeholders
[Rob Hunt] Enhanced Proposition for All Stakeholders For personal use only Proposition Commitment Customers & Superior customer service supported by an Preserve and continue to invest in the Community improved product and service offering Community Bank® model and retail Access to more product
Slide 11: Merged Group is Financially Stronger
Merged Group is Financially Stronger [Rob Hunt] For personal use only Bendigo Adelaide Merged Group Market Cap ($bn) 2.3 1.5 3.8 before synergies1 ASX 200 position (#)2 [96] [116] [Top 70] Shareholders (#) 53,500 28,500 82,000 Customers (#) 1,126,000 180,000 1,306,000 Branches (#) 357 25 382 2007 Ca
Slide 12: Enlarged Balance Sheet
Enlarged Balance Sheet [Rob Hunt] For personal use only Loan Mix ($bn) Funding Mix ($bn) 45.4 43.2 5.0 13.2 3.2 4.9 29.8 27.4 8.7 5.0 12.9 0.2 2.4 15.8 15.5 30.2 0.3 2.9 3.0 5.7 2.5 23.5 19.7 10.4 12.2 11.3 Bendigo Adelaide Combined Bendigo Adelaide Combined Residential Loans Business Loans Retail D
Slide 13: Diversified Business Mix
Diversified Business Mix [Rob Hunt] For personal use only Merged Group Bendigo (PBT)1 Adelaide (PBT)1 (Pro Forma PBT) ERB / JV Wealth 13% Wealth Wholesale Management Management Mortgages 23% Wealth 19% 26% Solutions Retail Retail & 13% Business Community Banking 61% Community Partners Banking 52% Re
Slide 14: Capital Position
Capital Position [Rob Hunt] For personal use only Standalone Position (as at 30 June 2007)1 Capital Management Plan Bendigo Adelaide Maintenance of dividend payout of 70% ACE 5.42% 5.50% Ongoing dividend reinvestment plan Tier 1 7.98% 6.26% Active capital management plan for Total 10.24% 10.88
Slide 15: Better Positioned to Grow and Innovate
[Rob Hunt and Jamie McPhee] Better Positioned to Grow and Innovate For personal use only Focused business units to drive growth Customer Acquisition Partnering n Customer Acquisition f Through retail Retail Wealth Business Wholesale branches and Banking Management Partners Mortgages distribution R
Slide 16: Retail Banking
Retail Banking For personal use only [TBC] Creating a national retail distribution network, comprising: f 357 Bendigo Community Bank® and corporate branches f 25 Adelaide retail branches f Financial planning f 1.3 million customers Continued growth in the branch network f Further investment in t
Slide 17: Wealth Management
Wealth Management For personal use only [Jamie McPhee] Combining Adelaide’s Margin Lending and Managed Funds business with Bendigo’s Sandhurst Trustees, equity portfolio investments and alliances f $6.9bn funds under management Improved customer access through expanded distribution network, incl
Slide 18: Business Partners
Business Partners For personal use only [Jamie McPhee] Combining Adelaide’s Portfolio Funding and Specialised Lending, with Bendigo’s Elders Rural Bank Joint Venture and SME offerings (including Oxford Funding) f $5.8bn1 loans under management Leverages risk, securitisation and specialist skills
Slide 19: Wholesale Mortgages
Wholesale Mortgages For personal use only [Jamie McPhee] Combining Adelaide’s wholesale mortgage business and Bendigo’s NMMC operation Focus on process efficiency and margin management to drive synergies for combined group Partnership model for mortgage managers and brokers is key and will rem
Slide 20: Synergies
Synergies For personal use only [Jamie McPhee] Potential pre-tax cost synergies of $60-65m Type Description Cost Synergies Functional overlap f Focus on back office overlap f Leveraging staff across business lines f Based on merit IT savings f Shared core banking systems Funding benefits f Imp
Slide 21: High Confidence in Successful Integration
[Jamie McPhee] High Confidence in Successful Integration For personal use only Cultural alignment of the two organisations is strong Commitment to maintain Bendigo and Adelaide headquarters with a split of functions Both brands will be maintained and grown No change to Community Bank® or par
Slide 22: Potential Value Creation from the Merger is Significant
Potential Value Creation from [Robert Johanson] the Merger is Significant For personal use only Potential Value Creation ($m) Key Drivers Strong underlying momentum in both businesses Reaping benefits of prior years’ 630 investments Significant cost synergy potential ($60- 1,511 65m pre-tax)
Slide 23: Key Steps and Timing
Key Steps and Timing For personal use only [Robert Johanson] The merger is anticipated to be implemented by November 2007 Merger Implementation Agreement signed 9-Aug-2007 Finalise due diligence and address conditions precedent Aug-Sep 2007 Scheme Booklet sent to Adelaide shareholders Oct-2007
Slide 24: In Summary
In Summary For personal use only [Robert Johanson] Merged group will have high quality earnings and growth profile Adelaide Shareholders Bendigo Shareholders Product and Channel Diversification 9 9 Geographic Diversification 9 9 Increased Scale and Efficiency 9 9 Funding Flexibility 9 9 Platform for
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