ANZ Bank to raise A$2.85 billion in placement, share sale, eyes RBS assets

Wednesday 27th May 2009

Australia & New Zealand Banking Group will raise A$2.85 billion in an underwritten share placement to institutions and a share purchase plan, strengthening its balance sheet as it prepares to bid for Asian assets of Royal Bank of Scotland Plc.

The placement is at A$14.40 a share, a 7.5% discount to the lender’s last traded price of A$15.57. The capital raising will add about 90 basis points to the bank’s capital ratios, it said in a statement today. ANZ Bank will also offer existing shareholders up to A$350 million of new stock in a share purchase plan which isn’t underwritten.

The capital raising creates “greater financial flexibility to pursue strategic and organic growth opportunities and to further strengthen the group’s capital position,” it said. “The banking outlook remains uncertain and difficult to predict, especially with respect to credit provisions, revenue and the market value of securities and derivatives.”

ANZ Bank is on a short-list of suitors for RBS’s Asian assets, along with HSBC Holdings Plc and Standard Chartered Plc on May 10, the Age newspaper reported this week. The Australian lender lobbied to be included as a potential bidder after RBS abandoned efforts to sell its entire Asia portfolio in one piece for up to 1 billion pounds, the newspaper said.

“ANZ’s long-term aspiration is to become a super regional bank focused on Australia, New Zealand and Asia Pacific,” it said today. The bank “recently submitted a non-binding proposal to RBS Group for selected businesses,” it said, without giving details.

Should ANZ succeed in buying assets from RBS, its Tier 1 capital ratio would be above the target range of 7.5& to 8%, it said.

The placement is underwritten by Deutsche Bank AG, JP Morgan Australia and UBS AG.

Businesswire.co.nz

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