Bendigo Bank reduces its stake in IOOF

Bendigo Bank today announced the sale of one million shares in IOOF Holdings Ltd, representing approximately 1.6 per cent of that company's stock.

The bank's managing director, Rob Hunt, said Bendigo remained committed to its strategic alliance with IOOF and had discussed the transaction with IOOF prior to the sale.

“We remain IOOF's largest shareholder and we have no plans to further reduce our holding,” Mr Hunt said.

“We are very comfortable with IOOF's strategic direction and management and we have communicated that to their board.

“But as part of Bendigo Bank's positioning, we will be diversifying our investment in the wealth management sector and this transaction was necessary to free up some capital to pursue other strategic opportunities that will arise.”

Mr Hunt said Bendigo Bank would book a $5.1 million pre-tax profit on its sale of IOOF shares, to be brought to account in its half-year result due to be announced on 14 February 2005.

“IOOF remains a strategic investment for Bendigo Bank, but it has also been a particularly lucrative investment.

“We are now in a position to realise – and pass on to our shareholders – some of the value we have helped to create in IOOF, while also strengthening our strategic position in the wealth management sector.”

Mr Hunt said Bendigo Bank retains approximately 8.4 per cent of IOOF Holdings Ltd.

“The bank has a close strategic relationship with IOOF, which provides funds management administration and investment management services to many of our wealth management customers.

“We therefore believe it is in the interest of both companies for Bendigo Bank to retain a significant shareholding, providing IOOF with the comfort that its stock is held by a partner who shares its aims for the business.”