Bendigo and Adelaide Bank says it has no need to raise more capital, in contrast to recent moves by the big four banks.
Australia's fifth largest retail bank also says it is in better shape than it was a year ago.
Chief executive Mike Hirst says Bendigo and Adelaide Bank has a higher capital ratio than the major banks.
Even though the major banks now have to hold more capital against mortgages, they still hold less than 65 per cent of the capital required by standardised banks like Bendigo and Adelaide Bank, for those same assets.
"For us, that means a few things: Given everything we know today, there is no imperative for us to raise capital in the absence of a large acquisition or new changes to regulation," Mr Hirst told shareholders at the bank's annual general meeting on Wednesday.
He said there was no doubt that the Bendigo Bank is in a better position today than it was this time last year.
One of the reasons was that the prudential regulator, APRA, had to some degree levelled the uneven playing field that had advantaged the major banks, after accepting recommendations of the Financial System Inquiry led by David Murray.
Also, the Great Southern class action had been resolved through a deed of settlement that did not result in the Bendigo Bank paying any funds across to Great Southern borrowers and all borrowers acknowledging that their loans from the bank were valid and enforceable.
Furthermore, Mr Hirst said Bendigo Bank was a substantial business and one of the top 60 companies listed on the Australian share market, with a balance sheet in excess of $66 billion and 7,200 staff across its head office and 520 branches.
Mr Hirst said although Bendigo Bank was in a better position, market conditions had not changed that much from a year ago when business and consumer confidence were low, and consumers were repaying debt at record levels.
Bendigo Bank chairman Robert Johanson said banking in Australia had generated a long period of high returns on capital for shareholders.
"We expect that over time these rates of return will reduce," Mr Johanson said.
"This seems inevitable in an economy where the risk-free rate is at all-time low levels, and where around the world returns on capital employed in banks are much lower than in Australia."
Meanwhile, Bendigo Bank said on Tuesday that Mr Hirst had agreed to extend his employment contract beyond the current term, which ends in July 2016. The continuing contract will not have a fixed term.
In August, the bank reported a 13.1 per cent rise in annual cash earnings to $432.4 million despite increased competition in the mortgage market.
Shares in Bendigo Bank closed seven cents higher at $10.63.
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