×

ANZ to raise $2.2B in share sale to meet tougher capital rules

144684017SB020_Australian_D
Getty Images

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.

Read MoreTrouble in paradise for Australia's property speculators

ANZ shares have been placed in a trading halt with trading expected to resume on Friday, August 7.

The share placement was underwritten by Citigroup, Deutsche Bank and JPMorgan.

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.