Bendigo and Adelaide Bank Ltd has now raised just under $300 million in new capital from big and small shareholders at the end of the retail offering.
The regional bank said yesterday that it had raised $121 million from retail investors as part of the now oversubscribed capital raising announced on August 10.
Bendigo said it received strong demand from eligible shareholders for the fully underwritten retail component, with applications worth $161 million.
This is in addition to $177 million raised from institutional investors on August 12.
The retail offer is however $6 million short of the $127 million target given last month for the retail component when it was announced on August 10.
As well as receiving their share entitlements, all eligible retail shareholders who applied for up to 1000 new shares in excess of their entitlement will have their applications allotted in full, Bendigo said in a statement yesterday.
The issue was done at a discounted $6.75 a share, so based on yesterday’s close of $8.18 a share (down 15 cents), everyone is in the black.
New group managing director Mike Hirst said in a statement the equity raising would strengthen the bank’s capital base, make the bank more flexible and position it to take up growth opportunities as markets improve.
More importantly its capital base has been strengthened ahead of the full impact of its exposure to the collapse of the managed investment scheme promoter, Great Southern.
The Bank said last month its exposure to borrowers in Great Southern Managed Investment Schemes was approximately $550 million.
"These loans are full-recourse to each individual borrower, with an average exposure of less than $70,000 and are spread across every state and territory in Australia.
"The Great Southern portfolio represents less than 1.5 per cent of the total Bendigo and Adelaide Bank asset base.
"A total of $20.2 million has been raised at June 30, 2009 in specific and collective provisions relating to the loans which form part of the Great Southern portfolio."
The bank said the 2009 financial year saw "a dramatic restructure of the Bank’s balance sheet, with a reduction in reliance on uncertain wholesale funding sources.
Retail deposits now represent nearly 90 per cent of on-balance sheet funding, with growth in deposits of 20 per cent – or almost $5 billion – over the last 12 months.
"The Bank’s capital position remains commensurate with the low risk nature of the loan book, with a total capital position of 10.91 per cent and a Tier 1 ratio of 7.43 per cent as at June 30, 2009.
"Once completed, the $300m equity raising will further strengthen the Bank’s capital position, increasing total capital to 12.11 per cent (June 09 pro forma) and Tier 1 Capital to 8.63 per cent (June 09 pro forma)," Bendigo told the ASX in the statement on August 10.
