Australia’s major banks have been raising large amount of capital in equity and debt of late, as the ongoing global financial turmoil is weighing heavy on their balance sheets. ANZ made a non-binding bid for the RBS assets, which was recently put up for sale as part of a strategy to withdraw from its home markets and exit or pare back in up to 36 of the nations from where it operates.
ANZ said that it will offer retail shareholders to purchase up to A$15,000 in new shares with no brokerage or transaction costs.
Donald Williams, Chief Investment Officer at Platypus Asset Management, said: “They’ve timed it very well. The short selling ban is off, and it was a strong market overnight. It’s a skinny discount, but it’s enough. I think they’ll get away with that…there’s a little bit more confidence out there about how the banks’ books will play out in the next couple of months. The conditions are more stable.”
ANZ said that some of the proceeds will also be utilised to strengthen its balance sheet and pursue strategic and organic growth prospects, disclosing that bad-debt charges may increase by 20% in the second half of its fiscal year, as its commercial segment is likely to witness additional stress in the near future.
