Australia’s ANZ unveils $2.2 bln share sale; more fundraising seen

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.

In other moves to boost capital ratios, Westpac, Australia’s No. 2 lender by market value, said it had increased the size of its perpetual hybrid offering to A$1.25 billion from its initial aim of A$750 million.

“ANZ’s capital raising is probably not a surprise but it reinforces the fact that bank returns may be lower for a while”, he said.

The shares will have a floor price of A$30.95, a discount of 5 per cent to its previous close with the final issue price to be determined after an accelerated bookbuild on Thursday.

Australian shares saw their sharpest fall in two weeks on Thursday as investors shrugged off commodities gains and sold bank stocks amid fresh concerns about how hard they will be hit by tough new capital rules.

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

THE bank’s shares were placed in a trading halt on Thursday when it announced the capital raising move, designed to lift its reserve levels, alongside a weaker-than-expected $5.4 billion profit for the nine months to June.

Adventure clothing retailer Kathmandu surged 13.5 cents, or 8.9 per cent, to $1.645 as it left the door open for a higher takeover offer after rejecting Kiwi retailer Briscoe’s bid of at least $NZ360 million.

“Given current market conditions, APRA’s compressed implementation timetable for the mortgage risk weight changes and the amount of capital to be raised, we believe a placement on these terms provides more certainty for shareholders than other methods available such as consecutive underwritten Dividend Reinvestment Plan”.