Westpac successfully raised A$2.5 billion through an issue of new shares on Tuesday at an 11% discount to its previous share price, increasing its tier 1 capital ratio to 8.32%. Commonwealth Bank of Australia (CBA), which owns ASB, is widely seen as the next bank likely to raise fresh capital to lift its tier one ratio over the 8% threshold now seen as necessary for Australian banks. The share prices of CBA, ANZ and NAB lost 8%, 5% and 5% respectively on Tuesday after Westpac's announcement forced many investors to the realisation that capital raisings would be necessary for some to keep their tier one capital ratios above 8%. CBA's tier one ratio was 7.5% at its last trading update. Westpac said its share issue at A$16 a share was heavily oversubscribed. * This article was first published yesterday in our daily subscription newsletter for the banking and finance industries. The email costs NZ$365 per annum and carries exclusive news and analysis for New Zealand banking and finance industry executives, regulators and investors. Sign up for a free trial here.
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