CBA raises $2.1 billion from institutions, shares slide as trading resumes

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The Commonwealth Bank has picked up $2.1 billion from institutions in the first part of its equity raising to prepare for stricter capital rules.

The bank says the institutional entitlement offer attracted strong demand, with about 90% of entitlements being exercised by shareholders.

The bank’s shares fell 1.89% in early trade today to $80.57. Its shares have been in a halt since Wednesday last week when the capital raising was announced.

About 71 million new fully paid ordinary shares, 4.3% of the company, are being issued in total.

The retail part of the offer opens next Monday and is expected to raise another $3 billion. Shareholders can buy 1 new share for every 23 shares at $71.50 each.

The Commonwealth is the last of the four big banks to reveal its capital plans to meet APRA’s new rules.

Westpac did a $750 million hybrid note issue, the ANZ a $3 billion issue of equity and the NAB has completed a $5.5 billion raising, the biggest in Australian corporate history, to partly back the float of its troubled UK business.

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