#1Bank of Queensland Proposal to merge Bank of Queensland and Bendigo Bank Investor Presentation 19th March 2007 1#2Bank of Queensland Agenda Strategic rationale for a merger between Bank of Queensland (BOQ) and Bendigo Bank (BEN) Key terms of the proposal Benefits to BEN and BOQ shareholders from a merger Proposed strategy and operating model for the merged entity Synergy potential 2#3Bank of Queensland Strategic rationale for a merger Potential value enhancement to BOQ and BEN shareholders (driven by potential pre-tax synergies of $70 million p.a.) Enhanced banking proposition for regional and community banking in Australia Significantly improved distribution platform ... the merged entity will have over 575 branches (significantly more than St George Bank & approaching Westpac) Facilitates creation of "big small bank", assisting to foster underlying growth in both banks and strengthens regional banking in Australia Increased financial and operational scale Better position to compete - efficiencies will assist the merged entity to move towards larger peers' cost to income ratios Creation of an S&P/ASX 100 company Two very complementary businesses with similar commitment to branch based Community banking and OMB models and superior customer service Provides employee opportunities and strengthens the performance culture 3#4Key terms of the merger proposal Scrip and cash proposal Value Implied premium (based on BOQ 1 month VWAP of $15.62 to 16 Mar 07) Implied premium (based on BOQ closing share price of $16.60 on 16 Mar 07) Board (post merger) Integration to combine management strengths Name (post merger) Mechanism to effect merger Conditions Scrip offer on exchange ratio of 0.748 BOQ shares and $5.50 in cash per BEN share (value of $17.18)(1) Exchange ratio is calculated based on 1 month VWAP trading prices for BEN and BOQ EPS positive impact for year ended August 2009 for both BOQ and BEN shareholders 30% premium to BEN closing share price as at 16 March 2007 of $13.21 25% premium to BEN 1 month VWAP of $13.74 36% premium to BEN closing share price as at 16 March 2007 of $13.21 30% premium to BEN 1 month VWAP of $13.74 5 BEN Board members to be invited to enlarged BOQ Board David Liddy (MD of BOQ) to be MD of enlarged Group and manage integration "Best of both" approach to choosing senior management To be defined - clear that all present brand names continue to exist BEN scheme of arrangement - vote by BEN shareholders BEN Board to recommend merger proposal Regulatory approvals Conditions typical for public offer Bank of Queensland (1) Value based on $15.62 (BOQ 1 month VWAP); exchange ratio will be adjusted to reflect BOQ entitlement issue 4#5The offer represents an enhanced financial proposition for BEN shareholders... Value creation for BEN shareholders through premium and ongoing participation in synergies of the merged group Enhanced earnings per share Strong premium proposed relative to recent share price performance Enhanced dividends per share... as a shareholder in merged group versus shareholder of BEN alone On-going participation in synergies and higher growth realised by merged entity ✓ Consideration in a tax effective form for BEN shareholders via rollover relief for scrip proportion BEN shareholders will own approximately 40% of the merged group Bank of Queensland LO#6Current BOQ shareholders benefit via ... Development of the platform for the next phase of growth and for the merged company to become a genuine and sustainable alternative in the Australian banking landscape The merger is expected to be earnings per share accretive in FY 08/09 Larger scale and improved geographic and revenue diversification ✓ Ongoing participation in synergies generated Enhanced strategic positioning of the enlarged BOQ BOQ shareholders will own approximately 60% of the merged group ✓ Creation of an S&P/ASX 100 company Entitlements issue to be made to all existing BOQ shareholders David Liddy will run the merged group Bank of Queensland CO 6#7Bank of Queensland Merged group will have five unique competitive advantages Service leadership and customer satisfaction Unique business models embedding branches in local communities Local knowledge and decision making Recognised and trusted brands Customer and community driven culture 7#8Customer Satisfaction (%) Merged group is positioned to be a clear service and community leader Customer satisfaction (1) 100% Big Four 88% 79% 80% 74% 69% 68% 65% 60% 40% 20% 0% BEN BOQ ANZ WBC NAB CBA (1) Source: Roy Morgan customer satisfaction survey released March 2007 Bank of Queensland Clear joint leadership on customer satisfaction Recent new advocacy research confirms BOQ and BEN'S customer satisfaction leadership 8#9Bank of Queensland Number of branches 1,200 1,010 Branch network of the merged group will be larger than SGB and approaching WBC Branch numbers(1) Big Four 1,000 787 781 800 634 575 600 390 400 355 200 0 CBA NAB (1) Source: Company data ANZ WBC BOQ + BEN SGB ADB 25 BEN BOQ 220 The merged entity will have a significant footprint on the eastern seaboard Significantly more branches than St George and broadly comparable with Westpac 9#10The strategy for the merged company What is our reason for being? To be Australia's other bank - working together to keep regional & community banking strong Vision Two critical goals... How will we recognise success? Objectives What are our unique assets? Sources of competitive advantage ...underpinned by... ...leading to outstanding shareholder outcomes Market leading customer experience (NPS (SM), sat.), aligning with community Operational excellence (C:I, ROA) Employee capability/engagement Asset and liability growth of 1.5-2.0x system Double digit earnings growth (cash EPS) Service leadership and customer loyalty Unique distribution models Local knowledge and decision-making Recognised and trusted brands Customer and community-driven culture Where will we create value? Bank of Queensland Our markets Grow with and through customers Protect core markets during integration Be the industry integrator of choice 10#11The strong brands will be retained and grown going forward Bank of Queensland bank different Sandhurst Trustees SUBSIDIARY OF BENDIGO BANK Bendigo Bank Elders Elders Rural Bank OXFORD FUNDING PIONEER Plussoolased Regional Briting Both brands have high levels of recognition and trust Brand message consistent with vision and strategy Reputation for strong customer service Recognised as contributors to local communities We will retain and build on these existing brands Bank of Queensland 11#12A clear operating philosophy will guide organisational decisions Corporate Centre Lean leadership, policy and compliance ■ P&L accountability close to the relevant market with external perspective BU-specific capabilities Decisions which do not fit in a 'lean' corporate centre or shared services environment are in the business units Model open to 'plug in' acquisitions 'One factory' Value-adding shared services Drive operational excellence and continuous improvement in shared services Standardisation of products and important processes Exploit synergies where possible Scale Expertise Deliver 'contestable' centre functions for the front line (internal customers) Frontline Profit engines of the company Provide enterprise leadership Strategic direction Shared vision, values, identity and image Corporate relationship management Set governance requirements and oversight of the control environment Appropriate risk management and audit independent of operating units Bank of Queensland 12#13Bank of Queensland Highlights of the integration No Community Bank branches or Owner Managed Branches will be closed and distribution footprint will continue to expand Both brands will be maintained and grown Continuing investment in BEN's Community Enterprises, ensuring the ongoing sustainability of local communities and economies BEN and BOQ headquarters will be maintained with functions split between locations BOQ's IT partner EDS has made a commitment to BOQ to consider establishing a presence in Bendigo 13#14Bank of Queensland The synergy potential is compelling We estimate synergies of c. $70 million per annum are achievable Cost synergies expected to be generated from: IT systems Operating expenses Listing and regulatory costs Funding benefits Revenue synergies will be targeted but have not been included in the $70 million 14#15Bank of Queensland Financing the proposal Consideration to be paid to BEN shareholders to comprise cash and BOQ shares Following the merger BEN shareholders will own approximately 40% of the merged entity BOQ will finance the merger through both equity and senior debt Equity to be raised through the issue of shares directly to BEN shareholders and an entitlements issue to BOQ shareholders Entitlement issue conditional on the merger completion BEN shareholders' scrip proportion to be adjusted for BOQ entitlement issue 15#16Bank of Queensland Source: IRESS $16.00 $14.00 BEN share price ($) $12.00 $10.00 $8.00 Mar-05 Jun-05 Sep-05 Dec-05 $18.00 Proposal represents 25% premium to 1 month VWAP of $13.741 The proposal represents a significant premium to BEN's historical trading range... BEN historical share price Premium relative to historical prices Based on BOQ's 1 month VWAP to 16 March ($15.62) Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 BEN share price ($) 1 Based on BOQ's 1 month VWAP of $15.62, implying an offer price of $17.18 BEN share price ($) $18.00 +30.1% +25.0% +24.6% +22.6% $16.00 $13.74 $13.79 $14.01 $14.00 $13.21 $12.00 $10.00 $8.00 16 March closing 1 month VWAP 3 month VWAP 6 month VWAP Based on BOQ's closing price as at 16 March ($16.60) $18.00 +35.7% +30.4% +30.0% +27.9% $16.00 $13.74 $13.79 $14.01 $14.00 $13.21 $12.00 $10.00 $8.00 16 March 1 month VWAP 3 month VWAP 6 month VWAP closing 16#17and a PE multiple far above peers' trading 2007F PE multiples multiples 2008F PE multiples 2007F PE multiple (x) 22.0x 20.0x × 18.0x Proposal represents 20.9x 2007F BEN EPS (1) 22.0x 19.4x 20.0x Proposal represents 19.0 x 2008F BEN EPS (1) 16.1x 15.6x 15.4x 16.0x 14.4x 14.3x 14.1x 13.6x 14.0x 12.0x 2008F PE multiple (x) × 18.0x 17.3x 16.0x 14.6x 14.2x 13.7x 14.0x 13.2x 13.1x 12.7x 12.0x 10.0x 10.0x III 12.3x 8.0x 8.0x BOQ BEN SGB NAB WBC CBA ANZ ADB BOQ BEN SGB NAB WBC CBA ANZ ADB (1) Based on BOQ one month VWAP of $15.62 Source: IRESS, analyst consensus (rebased to June) - share prices as at 16 March Bank of Queensland 17#18Summary Strong strategic rationale for a merger exists ■ The offer represents an enhanced financial proposition for shareholders of Bendigo Bank and Bank of Queensland Value enhancement driven by potential pre-tax synergies of $70m per annum Bank of Queensland A merger will create the "Big small Bank" 18#19Creating Australia's banking alternative...key statistics Combined market capitalisation in excess of $4 billion 1 (before value of synergies generated) More than 1.5 million customers and 575 branches Pro forma combined total assets of over $30 billion² Pro forma combined net profit after tax of $209 million³ (before $70 million of pre- tax) synergies 1. 2. 3. Bank of Queensland Based on closing market capitalisations for BOQ and BEN on 16 March 2007 and proposed BOQ entitlements issue Calculated on reported total assets for BOQ as at 31 August 2006 and reported total assets for BEN as at 31 December 2006 Calculated on reported net profit after tax for BOQ for the year to 31 August 2006 and reported net profit after tax for BEN for the year to 31 December 2006 19