Bendigo Bank yesterday said it planned to raise more capital that most likely will take the form of preference shares.Robert Johansen, chair of the bank's board, said the bank needed the capital to fund growth, "like the rest of the banking system".He said that "in due course" Bendigo "will consider underwriting our dividend reinvestment plan" and will "place shares as opportunities arise".He said: "We will give every opportunity to our existing shareholders to participate and shareholders will receive priority in any hybrid issues."Reflecting on the implications of the financial crisis Johansen said: "I would not want anyone to think anything but that the current conditions of the financial markets are very difficult and dangerous."Banks will "be better capitalised but will probably generate lower returns on capital than the 20 to 25 per cent rates that the market became accustomed to."Not that the market became accustomed to those returns from Bendigo and Adelaide Bank, whose returns never exceeded 17 per cent.The international banking system he said, "will survive but in a profoundly different form."Johansen noted that the bank's margin lending book declined from $5 billion to $3 billion.Rob Hunt, the bank's managing director, said deposits increased by $2 billion over the first quarter of the current financial year, the same net inflow as over the whole of the 2008 financial year.