Bendigo Bank announces Tier 1 capital raising

Bendigo Bank Limited today announced that it had lodged with the Australian Securities and Investments Commission a prospectus for the issue of Bendigo Bank Preference Shares (BPS) to raise up to A$100 million in Tier 1 capital, with the ability to accept oversubscriptions for up to an additional A$25 million. BPS are perpetual, non-cumulative, redeemable and convertible preference shares in Bendigo Bank. The prospectus has been lodged with the Australian Stock Exchange and a copy is available on Bendigo Bank’s website.

The BPS issue forms part of Bendigo Bank’s ongoing capital management program. Bendigo intends to use the proceeds from this Offer to fund future asset growth and to increase the size and diversity of its Tier 1 capital base.

In setting the terms of this Offer, the Directors wish to recognise the support of Bendigo Bank by its Shareholders – most of whom are retail investors – by providing them with an opportunity to diversify their investment in the Company. Therefore, as previously announced, those persons who were registered as Bendigo Bank Shareholders with a registered address in Australia as at 7.00pm (Melbourne time) on 14 February 2005 (Eligible Shareholders) will be entitled to receive an allocation of BPS in priority to other applicants. To obtain their priority allocation, Eligible Shareholders should call the Bendigo Bank BPS Information Line on 1300 656 793 to register to receive a copy of the BPS prospectus and a personalised application form.

Furthermore, to enable investors in BPS to spread the cost of their investment, BPS are being offered on a partly paid basis, with $50 per BPS payable on Application and $50 per BPS payable on 15 June 2006 (subject to the ability of Bendigo Bank to defer this payment to no later than 15 December 2006).

Depending on the take-up by Eligible Shareholders, those persons who were registered as Bendigo Bank Customers with a registered address in Australia as at 7.00pm (Melbourne time) on 14 February 2005 may also be entitled to receive an allocation of BPS in priority to other applicants who are not Eligible Shareholders in recognition of their support of Bendigo’s business.

Bendigo expects the Dividends to be fully franked. BPS offer a non-cumulative, floating rate dividend, payable quarterly in arrears. The Dividend Rate will be calculated each distribution period based on the 90 day bank bill swap rate plus a margin. The margin until the first reset date will be no less than 1.25% over the market rate. The first reset date will be 15 June 2015. The Dividend Rate and other key terms may be varied on each reset date. Bendigo can require exchange of the BPS on or after the first reset date or earlier in certain limited circumstances. If Bendigo does not exchange BPS or reset the terms at the first reset date, the margin will increase by 1.00%. The full terms and conditions of the BPS are set out in the prospectus.

As at 31 December 2004, Bendigo Bank’s capital adequacy ratios were strong with total capital as a percentage of risk-weighted assets amounting to 10.48%, with Tier 1 Capital at 8.16%. Upon receipt of the first instalment of BPS, and taking into account the previously announced share buyback currently underway, Bendigo Bank estimates that its Tier 1 Capital will be approximately 8.12%.

Bendigo expects to announce the Initial Margin on 6 May 2005. Bendigo reserves the right to vary the details of the offer, including timing and amounts to be raised. Key indicative dates relating to this Offer are set out below.

Full details of the BPS offer are contained in the Prospectus which is available from the Bendigo website at www.bendigobank.com.au or by calling the Bendigo Bank BPS Information Line on 1300 656 793.

Macquarie Equity Capital Markets Limited is the Lead Manager of the BPS issue.

Key indicative dates

* These dates are indicative only and subject to change

Important notice

The offer of BPS will be made in, or accompanied by, a prospectus that has been lodged with the Australian Securities and Investments Commission today. Anyone wishing to apply for BPS will need to complete the application form that will be in, or will accompany, the prospectus (in paper copy or electronic form) and return the application form during the offer period. The offer period is scheduled to open at 9.00am on 4 April 2005 and close at 5.00pm on 29th April 2005.

This notice does not constitute an offer of securities in the US or to any US person (as defined in Regulation S under the US Securities Act of 1933 (US Securities Act)). BPS have not been, and will not be, registered under the US Securities Act and may not be offered or sold in the United States or to, or for the account of, any US person except in a transaction that is exempt from the registration requirements of the US Securities Act and applicable US state securities laws.