Bendigo Bank is lowering its expectations on the benefits likely to flow from APRA's planned overhaul of capital rules across the banking system.At the half-year result in February the bank said that it expected revisions to risk weights to lower regulatory capital requirements by around 100 basis points for banks with advanced accreditation and 50 bps for ADIs under the standardised methodology.However, chief financial officer Travis Crouch was scrambling yesterday to temper some analysts' expectations of a surplus capital windfall for bank shareholders after the regulator finalises the new rules.While Crouch believes that APRA's modification of capital risk weights will deliver some relief to Bendigo and other deposit taking institutions he also distanced the bank from the February forecasts."It's definitively positive… but we need to wait for that to be finalised," he said in response to a question from CLSA analyst, Ed Henning.When Henning asked whether the bank was now less positive about the potential capital benefit from the reforms than six months ago, Crouch said:"Yeah, I would think so, Ed." Another thematic takeaway from the Bendigo analysts' briefing was continuing decline of fee income.Bendigo's non-interest revenue line took a big hit in the second-half as the impact of zero ATM pricing and lower trading income were felt. Crouch believes it is a trend that is likely to affect ADIs for some time to come."It's an industry wide challenge," he said."Fee income will continue to be under pressure whether its deposit pricing, deposit fees or lending."I'm not brave enough to call the bottom of that."Branch distribution is one area in the next few years where Bendigo is likely to defy the industry tendency.When asked whether the bank was contemplating a hard prune of its 500 branches across the country, Baker was pretty clear:"We do look at that but not at this stage," she said."We're more than comfortable with the size of the network."We're still getting demand from communities to open up new branches."New Bendigo CEO Marnie Baker and Crouch also moved to hose down concerns that the bank's farm lending book could deliver a few nasty surprises in the current financial year courtesy of the drought affecting parts of NSW and Queensland."I think the worst areas affected by the drought would represent three per cent of our agri-customer base," Crouch said."We are comfortable with the exposures we've got."