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Bendigo and Adelaide Bank is planning to launch a bond offer to its retail investors in a bid to raise money.
The bank said the costs of funds have become increasingly more expensive, as such, the bank has started looking for new ways to raise money.
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Currently the bank relies on deposit from savers for more than 90 per cent of the funds it needs to lend to borrowers.
The bank also pools its mortgages and sells them on to investors as a funding source, but this securitisation market is still recovering post-GFC.
The bank’s chief executive Mike Hirst said tapping the retail bond market would help the lender diversify its funding sources.
According to a report by Reuters, the bonds are expected to be three-year, floating rate bonds paying quarterly interest at 1.4 percent above the 90 day bank bill swap rate.
Bendigo and Adelaide Bank did not say how much it was looking to raise.
