Westpac has closed its $3.5 billion capital raising after making up a shortfall

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Westpac has closed its $3.5 billion capital raising by selling shares not taken up by retail investors at a premium.

In the shortfall sale, 22.7 million shares were sold at $29.50 each, well above the offer price of $25.50, raising almost $667 million.

Westpac shares were trading today at $30.21.

Retail shareholders who did not exercise their entitlements in the capital raising will get about $4 in cash for each share sold in the retail shortfall bookbuild.

The four major banks have been raising capital to meet stricter rules on capital holdings designed to make Australia more resilient to a financial crisis.

Westpac started a round of home loan rate rises last month, saying it needed to do that to make up for the extra costs of holding more capital. The bank increased its variable home loan rates by 0.2 of a percentage point to 5.68%.

At the same time it announced plans for the $3.5 billion equity capital raising.

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