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 addition to ANZ, Commonwealth Bank, Westpac, Australia and New Zealand Banking Group and National Australia Bank (NAB) are the other three banks, which have to add 200 basis points of capital.
NAB undertook a similar process in May to raise A$5.5bn.
ANZ is offering fully underwritten shares worth A$2.5bn to institutional investors and A$500m to its shareholders.
The latest offering will help the bank add around 78 basis points to its common equity Tier 1 capital ratio, taking the measure to 9.3%.
ANZ chief financial officer Shayne Elliott said: "Recent announcements by APRA have provided greater certainty around the timing and quantum of capital changes, particularly in relation to Australian mortgages.
"This capital raising will supplement our organic capital generation since June 2015 and allow ANZ to achieve a Common Equity Tier One (CET1) Capital Ratio above 9% following the introduction of APRA’s revised risk weightings next year. We expect that this will position our CET1 Capital Ratio in the top quartile of international banks on an internationally harmonized basis."
Image: The ANZ center in Australia. Photo: courtesy of Australia and New Zealand Banking Group Limited.
