Annual General Meeting: Bank expects continued success

Bendigo and Adelaide Bank Chairman, Robert Johanson, addressed shareholders today at the Bank’s first annual general meeting held simultaneously in two cities.

During an interactive satellite broadcast, Mr Johanson told shareholders in Adelaide and Bendigo that the Bank was this year celebrating the 150th anniversary of the formation of the first Bendigo Building Society and was well-versed in managing financial crises such as the current situation.

“Bendigo and Adelaide Bank is dealing with this crisis resolutely determined to emerge from it stronger, better equipped to help our customers and partners prosper and, as a result, to prosper ourselves.”

The Chairman said that while the current conditions were “very difficult and dangerous”, the bank was focused on the principles that had stood it in good stead through similar difficulties in the past: “Keep the business simple; work hard to maintain the trust of our customers; don’t take the relationship with customers for granted; support them in difficult times; be self-reliant; don’t depend on others – be they governments or wholesale markets – to save you; build prosperity rather than feed from it.”

Mr Johanson said he expected the banking system would survive, “but in a profoundly different form”.

“Much of it overseas has been already nationalised, the implicit government guarantee for deposits has become for much of the world explicit, differentials for credit quality will be much wider, capital flows will change and consumption patterns will alter.

“Activity based on financial engineering will reduce. Banks will hold more of the assets and liabilities of the community on their balance sheets. Credit will not grow at the unsustainable rates that the system had become used to over the past decade. Banks will be better capitalised.”

Mr Johanson said Bendigo and Adelaide Bank was considering an issue of convertible preference shares to finance its growth and further strengthen its balance sheet by replacing maturing subordinated debt.

He said the Bank was looking at raising capital through a hybrid non-innovative tier one instrument.

“In due course we will consider underwriting our dividend reinvestment plan and to place shares as opportunities arise.

“In all of this, where possible, we will give every opportunity to our existing shareholders to participate and shareholders will receive a priority in any hybrid issue.”

Mr Johanson told the meeting the merger between Bendigo and Adelaide banks was making good progress, with assets and liabilities consolidated on to one balance sheet, data moved on to one system and a consolidated management and board working well.

He announced to the meeting the bank had decided to redevelop the company’s Hindmarsh Square site in Adelaide into a new open-plan environmental five-star green-rated building to house the 900 employees working in the city.

Today’s meeting voted to adopt all resolutions on the meeting agenda. All items of business were approved on a show of hands. Full details of all proposals adopted are available in the Investor Information section of the Bendigo Bank website.

The text of Mr Johanson’s speech and the formal outcomes of the 2008 AGM were lodged with the Australian Stock Exchange earlier today.