Bendigo Bank share top-up offer
Bendigo Bank shareholders will be given the chance to purchase from 50 to 150 additional shares under a top-up scheme announced by Chairman Richard Guy today.
The offer will be mailed to Bendigo's 44,000 shareholders with their interim dividend payment on 31 March. It will be open to shareholders registered at 17 March 2004.
Mr Guy said the Company aimed to raise $22 million.
“Projected loan growth indicates that we will require an additional $20 million in tier one capital to maintain our target regulatory capital levels for the next six months.
“To achieve this objective, and reward our small shareholders, the top-up offer enables shareholders to buy a minimum 50 shares, increasing in multiples of ten to 150.
“If the participation rate is in line with past experience, we expect around 40 per cent of shareholders to participate in the offer.
“Again based on previous experience, this would provide about $22 million in additional share capital.”
Mr Guy said the offer would be priced at a 2.5 per cent discount to the average closing price for the five trading days ending 17 March 2004.
Share applications will be open until 23 April and the shares will be issued on 7 May.
Mr Guy said the anticipated $22 million in new shares would increase the number of shares on issue by around two per cent.
“We do not expect this will significantly dilute earnings or the final dividend due to be declared on 9 August.
“The Company is on track to achieve an increase in profit of 25 per cent for 2003/04 and to achieve our stated aim of increasing return on equity by one per cent over the year.
“We expect to be in a position to increase the final dividend over that paid in 2003.”
Mr Guy said the share top-up continued Bendigo Bank's active capital management strategy. This strategy also includes the regular sale of loans into its securitisation program, thereby reducing capital requirements.
“This approach to active capital management provides shareholders with a regular chance to review the balance of their shareholding in Bendigo Bank and round up their holding should they wish,” Mr Guy said.
“We need to raise additional capital because our lending and deposits continue to grow at record levels.
“Shareholders can expect to see more of this fine-tuning in future as we actively manage our capital levels in order to derive a better return from their investment.”
Bendigo's tier one capital at 31 December 2003 balance date was 8.30 per cent.