National Australia Bank said today it will raise A$2 billion ($1.35 billion) by selling new shares to institutional investors to shore up its balance sheet.
National Australia, which said its Tier 1 ratio under Basel II regulations will rise to about 8 per cent from 7.35 per cent, didn't reveal pricing details of the sale in its statement today.
National Australia joins AMP and Mirvac Group, which last week said they planned to raise more than A$1 billion by selling shares to bolster capital. Banks worldwide will need to raise more capital "by the shovel full" as they cut their reliance on debt amid the global credit crisis, National Australia Chief Executive Officer John Stewart told the Business Spectator last month.
Westpac Banking, the nation's second-biggest bank by market value, last month said it raised A$1.48 billion by selling corporate debt securities.
Australia & New Zealand Banking Group, the fourth-largest, on September 30th said it raised A$1.08 billion by selling convertible preference shares, more than double its original intention.
The sale will be managed by Goldman Sachs JBWere, Merrill Lynch. and UBS. National Australia's shares, which closed at A$22.15 on November 7th, are in a trading halt while the bank completes the share sale.
They've slumped 41 per cent this year, making the company the worst performer among the nation's seven biggest banks.
Bloomberg