Thursday 6th August 2015 |
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Australia & New Zealand Banking Group, one of the big four Australian lenders, will raise A$3 billion, largely through a placement to institutions, to meet new capital requirements recently announced by the Australian Prudential Regulation Authority.
The Melbourne based bank will sell A$2.5 billion of shares in a fully underwritten placement to institutional investors in a bookbuild today, with a further A$500 million to be raised in a share purchase plan to investors in Australia and New Zealand, it said in a statement. The bookbuild will set the final issue price for the placement in a range up from the underwritten floor of A$30.95.
The dual-listed shares were halted today, and last traded on the ASX at A$32.58, and on the NZX at $36.60.
The funds raised will let the bank meet the new capital requirements "more quickly and efficiently" before they come into effect on July 1, 2016.
"Recent announcements by APRA have provided greater certainty around the timing and quantum of capital changes, particularly in relation to Australian mortgages," ANZ chief financial officer Shayne Elliott said. "Given current market conditions, APRA’s compressed implementation timetable for the mortgage risk weight changes and the amount of capital to be raised, we believe a placement on these terms provides more certainty for shareholders than other methods available such as consecutive underwritten Dividend Reinvestment Plans."
Australian lenders have been raising capital to bolster their equity buffers after APRA announced plans to require banks to hold more capital on their books to mitigate the risk of losses on home loans. Earlier this year, Westpac Banking Corp raised A$2 billion through a dividend reinvestment plan, while National Australia Bank sold A$5.5 billion of stock in a rights issue.
The share purchase plan will be open to investors holding shares at the close of trading on Aug. 5, and allow them to buy up to A$15,000 of stock at either the placement price, or the volume weighted average price leaving up to the SPP less a 2 percent discount, whichever is lower.
ANZ also updated trading ahead of a formal announcement on Aug. 18 saying group cash profit rose 4.3 percent to A$5.4 billion in the nine months ended June 30, while the bank's total provision charge was 13 percent higher at A$877 million. Statutory net profit was A$5.58 billion in the nine month period, up from A$5.04 billion a year earlier.
BusinessDesk.co.nz
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