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National Australia Bank, which owns BNZ, has announced a surprise A$2 billion capital raising through the sale of new shares to institutional investors in Australia.
As recently as a few weeks ago NAB said it had no plans for a major capital raising.
"More favourable market conditions have enabled NAB to accelerate its capital management plans and accordingly, upon successful completion of the placement, NAB will no longer proceed with its underwrite of the DRP (Dividend Reinvestment Plan) for the 2008 final dividend," NAB said in a statement.
NAB has been the first of the big four banks to jump the gun in an expected rash of bank capital raisings in Australia as they all look to bolster their balance sheets.
This will put the remaining three, ANZ, Westpac and CBA, under pressure to move quickly while easy cash is available in the Australian market.
NAB said it would also offer retail investors the chance to buy up to A$10,000 worth of shares at the institutional sale price without brokerage, although it reserved the right to limit the retail capital raising to A$250 million.
The capital raising will increase NAB's Tier 1 capital ratio to about 8.0 per cent.
- INTEREST.CO.NZ
