52LR Sthn.pac.42a2aa

RNS No 2653x
BENDIGO BANK LIMITED
13th October 1998


BENDIGO BANK TO RAISE NEW CAPITAL

Bendigo Bank will embark on a two-stage program to raise up to $65 million in
new Tier 1 capital, Chairman Richard Guy announced today.

Mr Guy said the Bank required new capital to support its continued strong growth
and to fund the establishment with Elders Australia of a joint venture company
to deliver banking services to rural Australia.

"The Bank expects a satisfactory return on its capital investment in the
proposed joint venture.

Mr Guy said existing holders of Bank securities would be offered the opportunity
to participate in the capital-raising through:-

* An underwritten one-for-six renounceable rights issue made to existing
  ordinary shareholders, convertible noteholders and capital noteholders to
  raise $42 million, and

* A premium payment of 30 cents per security to encourage holders of the Bank's
  Convertible Notes to convert their notes to shares immediateely, rather than
  wait until the scheduled maturity date of 31 May 2000.

The Bank's 7.9 million Notes, issued as Lower Tier 2 capital, represent a
potential $23 million in Tier 1 capital once converted to shares.

"Under the rights issue, approximately 11 million new shares will be issued,
which will raise around $42 million in Tier 1 Capital," Mr. Guy said.

He said the rights issue, to be managed and underwritten by Austock Brokers,
would be dispatched in early November.

The issue would be made at $3.75 per share, payable in two instalments, an
initial payment of $2 with the balance due 12 months later.

The range of closing prices for Bendigo ordinary shares listed on the Australian
Stock Exchange since 1 September 1998 was $4.15 to $4.75, with a closing price
of $4.70 yesterday.

Mr. Guy said the Bank estimated that holders of Convertible Notes would benefit
financially by converting to shares now and receiving the 30-cent payment.

"The offer is expected to be dispatched next week.  Noteholders will still
receive the interest payment of 17.59 cents per note due on 30 November and
thereafter, of course, would be eligible for dividend payments on their shares.

"Based on an assumption that dividends continue at rates paid in recent years,
we estimate noteholders would be eight cents per note better off by converting
now rather than waiting until the due date for conversion."

Mr Guy said the capital-raising program was one of a number of strategic
initiatives being undertaken by Bendigo Bank, including Community Bank and the
recently-announced joint venture with  pastoral company Elders.

"Total assets of the Bank grew by more than 20 per cent in 1997/98 and we expect
a continuation of this solid growth, with trading results for the first quarter
being very solid.

"This fund-raising ensures Bendigo Bank maintains its strong capital position 
ahead of the expected further growth in assets.

"The raising also provides significant benefits to Bendigo Bank's shareholder
base, which has more than doubled to 17,000 in the three years since we
converted to bank status.

"Bendigo Bank enjoys a special relationship with its shareholders, a great many
of whom are also banking customers.  The Board wishes to ensure these
shareholders participate in this important new development and is therefore
offering the new shares at an attractive discount to the current market."

END

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