Bendigo Bank welcomes positive rating outlook

Bendigo Bank managing director Rob Hunt today welcomed the decision by international rating agency Standard & Poor's to place the bank on a positive credit watch.

In a statement issued earlier today, Standard & Poor's revised the rating outlook on Bendigo Bank Limited to positive from stable. At the same time, it affirmed Bendigo's BBB long-term and A-2 short-term ratings.

This followed an long-term upgrade to BBB+ issued by Fitch Ratings in January.

Mr Hunt said: "These positive moves in the Company's credit rating are obviously good news and will broaden our appeal in international markets.

“Standard & Poor's statement acknowledges the progress we have made in recent years in building our balance sheet, diversifying our asset base and improving our performance.

“This has resulted from a consistent strategy focused on helping customers achieve their financial goals and on building the capacity of each of the communities in which we operate.

“The many major investments we have made have already been expensed, meaning our balance sheet is very strong. We are in good shape to capitalise on further growth opportunities.”

Mr Hunt said Bendigo acknowledged the issues raised by Standard & Poor's – the bank's cost base and the sustainability of its business model in a competitive environment.

“We are confident that we have developed a robust, sustainable business model – in fact our key aim is to build inherent customer loyalty by ensuring that we remain relevant to customers as individuals and to the communities in which they live.

“Our strategy is to build businesses which generate strong, sustainable revenues and there is now clear evidence this is working. As this occurs, our cost-to-income ratio is trending downwards and we are confident we will achieve our target of 65 per cent by the June 2005 balance date.”

In its statement, Standard & Poor's said its positive outlook “reflects (our) view that Bendigo is steadily transitioning into a larger, stronger, more diversified institution”.

It noted Bendigo “increasingly diversified operational profile and loan book”, with the bank now holding 40 per cent of its loan and deposit book in interstate markets.