Bendigo & Adelaide Bank Ltd. · ASX:BEN
Bendigo & Adelaide Bank — Bendigo Bank — Debt Investor Presentation (March 2005)
55 slides from Bendigo & Adelaide Bank's debt investor presentation, Feb 28, 2005
Slide 1: Bendigo Bank Limited Debt investor update
Growing together Supporting communities, sharing success Bendigo Bank Limited Debt investor update March 2005 1 © Bendigo Bank
Slide 2: Agenda
Growing together Supporting communities, sharing success Agenda * Overview and profile ¢ Australian macro-economic conditions * Strategic focus — Strategy — Growth — Geographic and earnings diversification — Financial performance — Asset growth * Funding strategy * Summary 2 © Bendigo Bank
Slide 3: Bendigo Bank overview
Growing together Supporting communities, sharing success Bendigo Bank overview Headquarters in Bendigo, 150 km north west of Melbourne. * Formed in 1858 as a building society, and converted to a bank in 1995. ¢ Listed on the Australian Stock Exchange with market capitalisation of approximately $1.3
Slide 4: Profile
Growing together Supporting communities, sharing su Profile Diversified retail bank * Strong community and customer focus * Australia wide branch and alliance network * A unique and sustainable strategy delivering strong results ¢ Upward trend in credit ratings 4 © Bendigo Bank
Slide 5: Australian macro-economic conditions
Growing together Supporting communities, sharing success Australian macro-economic conditions 5 © Bendigo Bank
Slide 6: A robust Australian economy....
A robust Australian economy.... Australian GDP Growth (Real % Change) Growth remains strong Consumer and Business Confidence levels remain above long term averages. % ——GDP ——GNE Forecast es 4 ‘A, Y 1990 1992 1994 1996 1998 Sourer’ Nomura ABS. Australian Business Confidence (Net Monthly Balance) 9,
Slide 7: A robust Australian economy....
Growing together Supporting communities, sharing success A robust Australian economy.... Reserve Bank Overnight Cash Rate (%) 9 - 74 Reserve Bank holds a tightening bias... 6 4 54 4 T T T T 1995 1997 1999 2001 2003 Source: IRESS Headline and Ongoing Inflation (% y-y) . . ; 7 == Ongoing (Weighted Med
Slide 8: A robust Australian economy...
Growing together Supporting communities, sharing success A robust Australian economy... Australian Employment and Unemployment ' ty) (000s) — Persons employed (LHS) (%) 9,900 7 _ — Unemployment rate (RHS) 4 6.5 7 4 Unemployment levels 9,700 r 6.0 remain historically low 9500 - 9,300 4 r 5 9,100 : !
Slide 9: Strategic focus
Growing together Supporting communities, sharing success Strategic focus Craig Langford Chief Financial Officer 9 © Bendigo Bank
Slide 10: Strategic focus
Growing together Supporting communities, sharing su Strategic focus * Strategy * Growth * Geographic and earnings diversification * Financial performance * Asset quality 10 © Bendigo Bank
Slide 11: A unique and consistent strategy
Growing together Supporting communities, sharing su A unique and consistent strategy Cultivate strong retail connection through: * creating a distinctive brand * expanding distribution network (proprietary, Community Bank, alliances) * broadening product range * increasing our relevance A strategy a
Slide 12: Strategic progress
Growing together Supporting communities, sharing su Strategic progress * Brand welcomed Australia-wide * Branch network tripled in five years * Growing with alliance partners ¢ Broad product range includes e-bank, wealth solutions, business banking, rural banking (via Elders Rural Bank) * Customer n
Slide 13: Strategic focus
Growing together Supporting communities, sharing su Strategic focus * Strategy * Growth * Geographic and earnings diversification * Financial performance * Asset quality 13 © Bendigo Bank
Slide 14: A unique bank identity: Growing demand
Growing together Supporting communities, sharing success A unique bank identity: Growing demand * Positive market awareness & customer satisfaction surveys * Community Bank® demand continues * Solid growth continues in all states of Australia * Customer numbers: 2001 = 505,000 2004 = 960,000 14 © Be
Slide 15: Broadening distribution & products: Network growth
Growing together Supporting communities, sharing success Broadening distribution & products: Network growth NT BEL cB QLp BBL 51 WA cB. 42 BEL 8 28 SA BEL 4 SB os NSW ! 10) al i ing 267° BEL 80) BoL Bendigo Bank 150 “Be Gg GB Community Bank 4 43 Total TAS 293 BBL 6 e cB 2 Total Branch numbers 2001 =
Slide 16: Total assets
Growing together Supporting communities, sharing success Total assets A$ Millions 14,000 12,000 10,000 8,000 6,000 4,000 2,000 Dec 2002 | Dec 2003 16 © Bendigo Bank
Slide 17: Strategic focus
Growing together Supporting communities, sharing su Strategic focus * Strategy * Growth * Geographic and earnings diversification * Financial performance * Asset quality 17 © Bendigo Bank
Slide 18: Broadening distribution & products: Alliances
Growing together Supporting communities, sharing success Broadening distribution & products: Alliances ¢ Elders Rural Bank (JV bank - 300 branches) * Tasmanian Banking Services (6 branches) * Community Sector Banking * Guild Banking * Community Telco 18 © Bendigo Bank
Slide 19: Geographic spread
Growing together Supporting communities, sharing success Geographic sprea Loans Deposits EY SLADE EEN TI ee OE a EMEA EEE EN ET LLL Le 2% TAS ; 5% = WA 1% SA 14% QLD 6% OS/OTHER 12% NSW 60% VIC GEE COE EEE a, CE Ee 4% TAS 5% WA 3% SA 15% QLD 14% NSW 59% VIC BEC GaD Dec 2004 Dec 2004 19 © Bendigo Ban
Slide 20: Community Bank
Growing together tin arin Community Bank® * The community owns the franchise * Economic revitalisation of the community « 70 communities are already making sustainable monthly returns * 37 paying dividends to shareholders « Presence in each Australian state: regional and capital cities * $2.3 billio
Slide 21: Enhancing community capacity: Community Bank
Growing together Supporting communities, sharing success Enhancing community capacity: Community Bank® * $125m in community revenues retained by the local enterprises since Community Bank® * 750 new committed local staff * $3m contributed to local projects (increasing rapidly) * $2.8m in dividends p
Slide 22: Wealth Solutions
Growing together Supporting communities, sharing success Wealth Solutions * STL cash & mortgage funds (strong growth) * Sandhurst Australian Industrial Share Fund (2000) *« Bendigo Managed Funds (2002) Funds under management: 2001 = $1,004m 2004 = $2,568m (156% increase) Funds under advice: 2004 = $
Slide 23: Funds under management
Growing together Supporting communities, sharing success Funds under management A$ Millions 3,000 2,900 2,000 1,500 1,000 500 Dec 2004 23 © Bendigo Bank
Slide 24: Elders Rural Bank Limited
Growing together Supporting communities, sharing success Elders Rural Bank Limited * Joint venture with the Elders pastoral group. * The bank focuses on agribusiness and leverages the extensive Elders Australia-wide distribution network with Bendigo Bank banking skills, products and systems. * Over
Slide 25: Electronic banking
Electronic banking * ATMs 2001 = 117 * Eftpos terminals 2001 = 1,982 * e-bank 124,000 active users *« Phone Bank 90,000 active users 2004 = 297 2004 = 6,247 Growing together Supporting communities, sharing success * Significant growth in Bpay, bulk payments, on-line TT’s 25 © Bendigo Bank
Slide 26: Strategic focus
Growing together Supporting communities, sharing su Strategic focus * Strategy * Growth * Geographic and earnings diversification « Financial performance * Asset quality 26 © Bendigo Bank
Slide 27: Performance summary
Performance summary A$ Millions Net Profit after Income Tax Net Profit before specific items Lending approvals Retail deposits Return of Average Assets Return on Average Equity Earnings per Share - cents Dividend - cents Dec-03 34.6 33.2 3,098 8,396 0.71% 11.90% 26.9 17.0 Dec-04 42.8 38.9 2,987 9,62
Slide 28: Full year comparison
Full year comparison Profit ROE EPS Dividend Market value 2001 $33.3m 9.03% 31.5 cents 29.0 cents $725m 2004 Actual $79.8m 12.99% 60.2 cents 40.0 cents $1,365m 2004 Normalised $73.2m 11.91% 55.2 cents Growing together Supporting communities, sharing success 28 © Bendigo Bank
Slide 29: Operating profit after tax
Growing together Supporting communities, sharing success Operating profit after tax AS Millions 50 45 40 35 30 Li Jun 2002 | Dec 2002 Jun 2004 | Dec 2004 29 © Bendigo Bank
Slide 30: Profit contributions
Growing together Supporting communities, sharing success Profit contributions A$ Millions 25 20 15 10} 18 3.8 5 Retail Bank Elders Rural Wealth Community Bank Solutions Bank 30 © Bendigo Bank
Slide 31: Interest margin
Growing together Supporting communities, sharing success Interest margin Jun 2003 Dec 2003 | Jun 2004 | Dec 2004
Slide 32: Analysis of net interest margin
Analysis of net interest margin % 2.7 26 Cash to Bills Funding Mix . spread 0.02 (0.08) Competition (0,04) 2.5 Alliance margin share (0.03) 2.4 2.3 2.2 HEME ek Growing together Supporting communities, sharing success Jun 2004 | Dec 2004 32 © Bendigo Bank
Slide 33: Operating expenses
Growing together Supporting communities, sharing success Operating expenses $139.0m $157.6m Dec 2003 Dec 2004 MMM 49% Staff & related costs MMM 50% Staff & related costs WA 22% Administration & other expenses WM 22% Administration & other expenses HB 9% = Information technology costs GM 7% = informa
Slide 34: Non-interest income
Growing together Supporting communities, sharing success Non-interest income $73.4m $88.7m EEE LOL LTE OEE EEE Dec 2003 Dec 2004 MM 34% Deposit A/C & transaction fees MM 35% Deposit A/C & transaction fees WW 17% Loan fees WM 17% Cornmissions (primarily Wealth Man.) MMH 16% Commissions (primarily Wea
Slide 35: Efficiency ratio: Operating expenses/income
Growing together Supporting communities, sharing success Efficiency ratio: Operating expenses/income Dec 2002 Dec 2003 Dec 2004 35 © Bendigo Bank
Slide 36: Commercial loans
Growing together Supporting communities, sharing success Commercial loans $1,522m $2,052m Dec 2003 Dec 2004 34% Property & business services MM 40% Property & business services 15% Other MMB 12% Retail trade 12% Retail trade GME 11% Agriculture, forestry & fishing 12% Agriculture, forestry & fishing
Slide 37: Loan portfolio
Loan portfolio % By purpose “Dec 2003 | Dec 2004 Nonresidential By security Growing together Supporting communities, sharing success Dec 2003 Ti Dec 2004 Commercial Unsecured 37 © Bendigo Bank
Slide 38: Non-accrual loans
Growing together Non-accrual loans Ag Mitfions 20 18 16 14 12 10 ON FD ® 38 © Bendigo Bank
Slide 39: Provision for doubtful debts
Growing together Supporting communities, sharing success Provision for doubtful debts A Millions 70 60 50 40 30 20 10 OL Dec 2002 Dec 2004 _ Specific. 39 © Bendigo Bank
Slide 40: Strategic focus
Growing together Supporting communities, sharing su Strategic focus * Strategy * Growth * Geographic and earnings diversification « Financial performance « Asset quality 40 © Bendigo Bank
Slide 41: Asset quality: Impaired loans / total assets
Growing together Supporting communities, sharing success Asset quality: Impaired loans / total assets % 0.20 0.18 0.16 0.14 0.12 0.10 0.08 0.06 0.04 0.02 0.00 | Dec 2002 Dec 2003 Dec 2004 41 © Bendigo Bank
Slide 42: Sunstate LMI
Growing together Supporting communities, sharing success Sunstate LMI * Sunstate Lenders Mortgage Insurance- a wholly owned subsidiary of Bendigo Bank- APRA regulated * Sunstate is reinsured with Radian Insurance Inc, a United States based insurer (S&P long term rating AA+) * All new loans with LVR
Slide 43: Capital adequacy
Growing together Supporting communities, sharing success Capital adequacy 10.65 10.26 10.48 ON & DD WO 43 © Bendigo Bank
Slide 44: Capital structure
Growing together Supporting communities, sharing su Capital structure e Reviewed current structure in light of current market conditions e New target capital mix- tier one 7.50% tier two 2.75% e Issue of Perpetual Step-up preference shares On market share buy back | More efficient capital structure
Slide 45: Funding strategy
Growing together Supporting communities, sharing success Funding strategy David Robertson Manager Treasury Financial Markets 45 © Bendigo Bank
Slide 46: Funding strategy
Growing together Supporting communities, sharing su Funding strategy Above peer-group levels of core retail funding * Regular participant in wholesale markets « Extending duration of liabilities by term issuance ¢ Diversification via offshore demand « Responsive to investor appetite and feedback 46
Slide 47: Core retail deposit base: Funding mix
Growing together Supporting communities, sharing success Core retail deposit base: Funding mix % 100 Dec 2002 — | Dec 2003 Dec 2004 47 © Bendigo Bank
Slide 48: Current wholesale funding capability and objectives
Current wholesale funding capability and objectives Growing together Supporting communities, sharing success Commitment to wholesale market, to cement relationships and add diversity to very strong levels of retail deposit funding. Programme Size EMTN US$500m ECP US$500m Domestic Debt Issuance A$1 b
Slide 49: Recent wholesale transactions
Growing together Supporting co Recent wholesale transactions Date Tenor Size Level August 2002. 3yearEMTN US$100m 3m US Libor +39 March 2004 3 yearEMTN US$150m 3m US Libor +37 Sep 2004 3 year FRN A$300m 3m BBSW +38 Feb 2005 10non call 5yr A$45m 3m BBSW +75 sub 49 © Bendigo Bank
Slide 50: Credit ratings
Growing together Supporting communities, sharing su Credit ratings Senior Short term Outlook Standard & Poor's BBB+ A-2 Stable Fitch BBB+ F2 Stable Main credit strengths and highlights as identified by major ratings agencies include: * geographical diversification * sound credit quality * sustained
Slide 51: Positive Ratings Migration
Growing together Supporting communities, sharing success Positive Ratings Migration Bendigo Bank - Credit Rating Profile History BBB+ | BBB . r S&P upgraded rating to BBB+ on 14 Feb 2005 BBB- Fitch Ratings upgraded rating to 1 | | + 7506! 7508! 2000" 2002" 2004" 2006" BBB+ on 2 Feb 2004 Time Legend
Slide 52: Summary
Growing together Supporting communities, sharing success Summary 52 © Bendigo Bank
Slide 53: Bendigo Bank - an excellent investment proposition
Growing together Supporting communities, sharing su Bendigo Bank- an excellent investment proposition * An Australian bank, formed in 1858, operating under the strict regulation of the Australian Prudential Regulatory Authority. * Listed on the Australian Stock Exchange with a market capitalisation
Slide 54: Proposed transaction details
Growing together Supporting communities, sharing success Proposed transaction details Issuer Type Issue Size and tenor Listing Joint Lead Managers Bendigo Bank Limited Floating Rate Notes under EMTN programme Subject to investor demand London Nomura International PLC WestLB AG 54 © Bendigo Bank
Slide 55: Contacts
Contacts David Robertson Manager Treasury Financial Markets +613 5433 9877 david.robertson@bendigobank.com.au Craig Langford Chief Financial Officer +613 5433 9768 craig.langford@bendigobank.com.au NOMURA Gerard Perrignon Mobile 0417 238 512 Phone +612 9321 3801 gerard.perrignon@au.nomura.com James
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