opportunistic on acquisitions

Bendigo and Adelaide Bank bullish on $177m raising

August 13, 2009
Article from: Australian Associated Press
BENDIGO and Adelaide Bank has raised $177 million in an institutional placement, part of a $300m capital raising.

Bendigo's managing director, Mike Hirst, said more than 95 per cent of the bank's institutional shareholders took up their full entitlements under the 1-for-12 entitlement offer, priced at $6.75 per share.

Bendigo shares were trading at $8.03 when they went into a trading halt on Monday to allow the equity raising to take place.

The institutional rights offer raised about $50m, with a further $127m coming from an institutional placement, the bank said yesterday.

A retail rights issue, opening on Monday, will also offer shareholders 1-for-12 ordinary shares at $6.75.

Mr Hirst said on Monday that the fresh equity mostly would fund organic growth until the bank can generate capital internally in about 12 months' time. "We think we'll be able to generate a result this year, given everything we know today, that will put us in a position of generating capital internally," Mr Hirst said.

"We'd be opportunistic on acquisitions, but it is not something we're focusing on at the moment."

Opportunities are expected to emerge in the wealth management, margin lending and third party mortgages spaces if securitisation markets reopen. Bendigo said the capital raising would lift its tier 1 capital ratio to 8.63 per cent on a pro forma basis, and increase total capital to 12.11 per cent.

The capital raising followed Bendigo posting a 57.7 per cent plunge in 2008-09 net profit after tax to $83.8m and a 34 per cent full-year dividend cut.

Bendigo shares closed down 1c at $8.01.

http://www.theaustralian.news.com.au/business/story/0,28124,25921061-36418,00.html