BEN ups stake for rural bank
(11 May 2009 – Australia) Bendigo and Adelaide Bank (BEN) has increased its stake in Elders Rural Bank (ERB) and changed the name of the bank in a commitment to rural lending.
BEN increased its stake in ERB from 50 percent to 60 percent, subject to regulatory approval.
The purchase of the extra 10 percent of the specialised rural lender is for approximately $33.9 million, with the other 40 percent retained by Elders Limited.
Under the change of ownership, ERB will change its name to Rural Bank Limited (Rural Bank) from July 1, 2009.
The group managing director of Bendigo and Adelaide Bank, Rob Hunt, said that the decision was a further indication of BEN’s commitment to providing an alternative banking option, particularly in rural and regional Australia.
While the name change simply takes the ‘Elders’ off the name, Hunt said that it will allow Rural Bank to explore additional distribution arrangements throughout rural Australia, adding substantial growth prospects to the bank.
BEN’s purchase was funded through existing liquidity, and total capital will remain broadly unchanged. The purchase is also expected to be earnings per share accretive for BEN.
Hunt said that the bank will continue to explore opportunities that present themselves in this market.
ERB’s net profit after tax for the six months to December 31, 2008 was $22.4 million. Loans under management at this time were $3.7 billion. Deposits were $4.0 billion, with more than 90 percent of these retail deposits.
The purchase of the extra 10 percent of the specialised rural lender is for approximately $33.9 million, with the other 40 percent retained by Elders Limited.
Under the change of ownership, ERB will change its name to Rural Bank Limited (Rural Bank) from July 1, 2009.
The group managing director of Bendigo and Adelaide Bank, Rob Hunt, said that the decision was a further indication of BEN’s commitment to providing an alternative banking option, particularly in rural and regional Australia.
While the name change simply takes the ‘Elders’ off the name, Hunt said that it will allow Rural Bank to explore additional distribution arrangements throughout rural Australia, adding substantial growth prospects to the bank.
BEN’s purchase was funded through existing liquidity, and total capital will remain broadly unchanged. The purchase is also expected to be earnings per share accretive for BEN.
Hunt said that the bank will continue to explore opportunities that present themselves in this market.
ERB’s net profit after tax for the six months to December 31, 2008 was $22.4 million. Loans under management at this time were $3.7 billion. Deposits were $4.0 billion, with more than 90 percent of these retail deposits.
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