Westpac in $2.5 billion capital raising
Westpac is the latest of the big four banks to announce it will take part in a capital raising, with the bank to embark on a fully underwritten institutional share placement to raise $2.5 billion.
The decision to undertake the capital raising was in part influenced by the impact of the slowing economy and possible further deterioration in credit and operating conditions, the bank’s statement to the Australian Securities Exchange said. It would also enable Westpac to take advantage of potential growth opportunities.
The bank said that demand on its balance sheet is expected to increase in coming months, as a result of corporate bonds reaching maturity and a reduction in foreign bank capacity for Australasian corporates. Furthermore, the bank said that with hybrid equity markets becoming increasingly challenging, its “ability to raise capital through this mechanism, including the replacement of St George Bank hybrids, is uncertain”.
The placement will be conducted by way of an institutional book build, and the bank’s shares have been placed in a trading halt, which is expected to be lifted tomorrow morning.
Westpac will also offer retail shareholders the opportunity to participate in a non-underwritten share purchase plan, with subscriptions of up to $10,000 of Westpac ordinary shares available. Applications will be scaled back if total demand exceeds $500 million.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
