BENDIGO Bank managing director Marnie Baker says the bank's first half results reflect "an absolute growth story," despite a 28.2 per cent drop in statutory net profit.

"The bank is in an extremely strong position," Ms Baker said.

"It is well capitalised. Raising more capital is about giving us the opportunity to grow further."

The bank is seeking to raise $300 million of capital by an underwritten institutional placement and non-underwritten share purchase plan.

Ms Baker said the bank had no plans to make staff redundant.

She said the reason for the capital raising was threefold.

"It's to support the growth that we're seeing in residential lending growth... and continued strong residential growth we are predicting into the future," Ms Baker said.

"It's to support some investment into technologies and regulatory-related change initiatives.

"The third is to increase the buffer above APRA's unquestionably strong capital ratio requirements."

Ms Baker did not rule out branch closures, but said there was no linkage from a capital perspective.

"It's part of normal operation to continually review our operations in response to changing customer preferences and needs," she said.

Bendigo Bank closed a couple of branches in the first half of the financial year.

Ms Baker said the bank had also added a couple of agencies, including three new concept branches.

She said Bendigo Bank was testing and trialling different things to ensure any physical presence was meeting the needs of communities and was evolving to ensure the bank's relevance.

Earlier

BENDIGO Bank's net profit has fallen 28.2 per cent to $145.8 million according to the organisation's interim financial results announced on Monday.

The bank has reduced its dividends by 4 cents, to 31 cents per share for the half-year ending December 31, 2019.

Managing director and chief executive Marnie Baker said the reduction was needed to make sure dividends were sustainable, funds were kept for growth and to enable the bank to deliver its strategy.

Read more: More redundancies possible at Bendigo Bank

Ms Baker said the bank's earnings for the half were affected by ongoing technology investment, regulatory and compliance costs and staff investment to support mortgage growth.

The bank's cash earnings after tax were $215.4 million, down two per cent.

Its net interest margin was 2.37 per cent, up two basis points.

Total income on a cash basis was $814.7 million, up 1.4 per cent.

Bad and doubtful debts were $23.2 million, down nine per cent.

The Bendigo Bank is also planning on capital raising.

Ms Baker said the bank plans to raise $300 million of capital by an underwritten institutional placement and non-underwritten share purchase plan.

She said these proceeds would be used to support the banks growth in its residential mortgage lending, used to strengthen its balance sheets and provide an increased buffer to the Australian Prudential Regulation Authority's capital ratio requirements.

Ms Baker said strong customer growth continued, with a 4.9 per cent increase in the half - setting a record of more than 1.8 million customers.

She pointed to a heightened regulatory focus, below average business confidence and increasing frequency and severity of weather events due to climate change, constantly changing and heightened customer preferences, global trade tensions and the longer-term impacts of bushfires, drought and coronavirus as facing the market.

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