Australia and New Zealand Banking said it will raise 3 billion Australian dollars ($2.2 billion) in a share sale, the latest move by Australia's biggest lenders to boost capital ratios in the wake of tougher regulatory requirements.
The country's banks have one year to raise A$7 billion after the Australian Prudential Regulation Authority asked for a bigger cash buffer against mortgages to make them "unquestionably strong."
A fully underwritten institutional placement will raise A$2.5 billion while another A$500 million will be raised through a share purchase plan offered to shareholders in Australia and New Zealand, ANZ said.
The shares will have a floor price of A$30.95, a discount of 5 percent to its previous close with the final issue price to be determined after an accelerated bookbuild on Thursday.
The capital raising will help ANZ to achieve a Tier-I ratio of 9.3 percent, ANZ Chief Financial Officer Shayne Elliott said in a statement.
"We expect that this will position our CET1 Capital Ratio in the top quartile of international banks," he added.
ANZ shares have been placed in a trading halt with trading expected to resume on Friday, August 7.
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.
In May, National Australia Bank announced a A$5.5 billion a rights issue, one of the biggest in Australian corporate history, in anticipation of the stricter capital rules.