CBA’s capital raising comes on the heels of similar rights issues by NAB and ANZ as APRA puts pressure on the big banks to make their capital ratios “unquestionably strong” by international standards.
The bank will conduct a capital raising through a $5 billion pro rata renounceable entitlement offer, taking the group’s Basel III common equity tier one (CET1) ratio to 14.3 per cent on an internationally comparable basis (and 10.5 per cent on an APRA basis).
Eligible shareholders will be entitled to buy one new share for every 23 shares held on the record date at an offer price of $71.50 (a 10.5 per cent discount to the dividend-adjusted closing price on 11 August).
Approximately 71 million new, fully paid CBA ordinary shares will be issued, representing around 4.3 per cent of shares on issue.
As for the 2014-15 financial year result, the $9.14 billion cash net profit constitutes yet another record for the Australia’s largest bank.
The CBA board declared a final dividend of $2.22 per share, up two per cent on the 2014 final dividend.
The cash dividend payout ratio for the full year was 75.1 per cent of cash net profit, in line with the board’s target range of 70 to 80 per cent.
Headline funds management income was flat at $1.94 billion, but when the impact of property transactions was excluded, funds management income was up eight per cent.
Expense growth was up five per cent on the previous year, due to staff expenses and the impact of a lower Australian dollar.
