ANZ completes $2.5b raising

ANZ Chief financial officer Shayne Elliott said that given the current market conditions, APRA’s timetable and the amount of capital to be raised, the bank believed a share placement provided more certainty for shareholders than other methods such as consecutive underwritten dividend reinvestment plans.

ANZ today announced it had raised $2.5 billion in new equity capital through the placement of approximately 80.8 million ANZ ordinary shares at the price of $30.95 per share.

Banking regulator Australian Prudential Regulation Authority (APRA) has required the country’s four top banks to raise their capital in order to meet any contingencies resulting from home loans.

The share sale will consist of a fully underwritten institutional placement worth A$2.5 billion while another A$500 million will come from a share purchase plan for shareholders in Australia and New Zealand.

ANZ last closed at A$32.58 and will resume trading on Friday.

At 1015 AEST, Commonwealth Bank was down $1.925 cents at $85.44, National Australia Bank lost 67 cents to $33.67 and Westpac was lower 85 cents to $33.64. ANZ also said its provisions for bad and doubtful debts had increased, partly due to stress in the resources and agriculture sectors. That was ahead of the consensus analyst forecast of $US2.5 billion, on Bloomberg data.

The biggest gains of the day were enjoyed by OzForex, up 12.4 per cent to close at $2.54 after the release of an ambitious new strategy, and retailer Kathmandu Holdings, after the company’s board announced it would reject a takeover offer and provided an upbeat trading update. Australia) by comparison trades at 15.3 times, Insurance Australia Group (IAG.