The ANZ bank went into a trading halt today as it announced a $3 billion capital raising via a share placement to institutions and retail shareholders.
The bank says the capital, $2.5 billion from institutions and $500 million from retail shareholders, will allow it to more quickly and efficiently accommodate additional capital requirements recently announced by APRA.
The ANZ cited the increase in average credit risk weights for major bank Australian mortgage portfolios to 25% taking effect from July next year.
All the major banks are moving to bolster their capital.
And the NAB has completed a $5.5 billion capital raising, the biggest in Australian company history, so it can float off its troubled UK subsidiary Clydesdale Bank.
The final issue price for the ANZ issue will be determined through an accelerated book-build to be completed today in a price range up from $30.95. The bank’s shares closed yesterday at $32.58.
Shareholders can subscribe for up to $15,000 of ANZ ordinary shares without incurring brokerage fees.
Shayne Elliott, the ANZ’s CFO, says recent announcements by APRA have provided greater certainty around the timing and size of capital changes.
The ANZ is due to release a trading update on August 18.
However, the bank today gave an update for the nine months to June 30. Cash profit was $5.4 billion, an increase of 4.3% on the same period in 2014 ($5.18 billion).