ANZ to raise $3bn for new capital requirements

Deutsche Bank, Citi and JPMorgan are raising up to $3 billion for ANZ Banking Group via a placement and a share purchase plan.

But the nine-month windfall fell short of market expectations.

“Resource stocks profited directly from the rise in the spot price, while also helping the sector was yesterday’s rumours of a potential pick up in Chinese steal demand and also reports of Chinese interest in the infrastructure assets of Fortescue”, Quay Equities head of trading Tristan K’nell said. “That’s a concern and the inferred meaning is if ANZ is feeling it, they are all going to feel something”, Mr Lucas said. It will raise another A$500 million through an offering to shareholders.

“We’re seeing weakness in the banks as shareholders look at the fund ANZ’s capital raising, so that’s undermining the strength of the banks at this stage”, he said. The move will dilute the value of existing ANZ shares, and has heightened expectations of a similar move from Australia’s largest bank, the Commonwealth, which reports its annual results on Tuesday.

The shares are being offered at an underwritten floor price of $30.95, a 5 per cent discount to the last close.

Trading in ANZ shares is expected to resume at 10am today. CBA shares closed $2.82, or 3.2 per cent, lower at $84.55 while Westpac lost $1.05, or 3.04 per cent, to $33.44 and NAB dropped 75 cents, or 2.2 per cent, to $33.59.

ANZ said the institutional placement and SPP will allow the bank to “more quickly and efficiently accommodate” additional capital requirements that were recently announced by APRA – in particular, the increase in average credit risk weights for the mortgage portfolios of major Australian banks to 25 per cent, which takes effect from 1 July 2016.