The two-brand strategy of Bendigo and Adelaide Bank in the South Australian market receives a defence, though not an explanation, from the bank in its annual report.One of the puzzles for the bank's competitors in the state is the continuing investment by the bank in the (mainly) television advertising campaign for the Bendigo Bank brand in Adelaide over the last month or so. This campaign (with the tag line "It's all about U") debuted nationwide during the Olympics and continues.Bendigo Bank (or, formally, Bendigo and Adelaide Bank) now owns the Adelaide Bank retail bank network.In the annual report, published yesterday, the bank's management wrote that "we will ensure we pay respect to the Adelaide brand" but added that "we see a great opportunity for Bendigo to become a meaningful competitor in Adelaide Bank's home state".This, presumably, will be through expansion of the Community Bank network of franchised branches under the Bendigo brand.There are nine Community Bank branches in South Australia and 27 Adelaide Bank branches.Meanwhile the Bendigo annual report assures shareholders that "we expect to grow shareholder value again" and states that "we have been able to adequately fund all profitable business and activities".The report notes that "the challenges we face are considerable", thanks to the credit crunch, and says that "our businesses previously benefiting from funds emanating from wholesale markets face further challenges … we believe our partner-advised businesses can be reshaped". These are largely the niche business and investment lending activities funded through the wholesale arm of Adelaide Bank.The bank said it was "not expecting to significantly grow our balance sheet in the short term" though "we are expecting revenue to continue to grow".The legal transfer of the banking business of Adelaide Bank to Bendigo is likely to take place in early 2009.