NewANZ to raise US$2.2 billion in share sale to meet tougher capital rules

Australia and New Zealand Banking Group said it will raise A$3 billion (US$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 $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 per cent 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 per cent, 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.