NAB has decided to more than double its latest raising after a reported flood of interest from retail investors, with the bank now pushing for an extra $750 million in capital.
The big four bank stated “given the strong support shown by eligible shareholders”, it would be increasing the size of its share purchase plan (SPP) offer to $1.25 billion from its initial $500 million.
Under the plan, around 88 million new fully paid NAB ordinary shares will be issued to successful applicants on 2 June at an issue price of $14.15 per share, representing approximately 2.8 per cent of NAB’s ordinary shares on issue.
Chief executive Ross McEwan commented the capital will be used to protect the bank against COVID-19, including the possibility of a “prolonged and severe economic downturn”.
“We received strong interest in the offer, allowing us to increase its size by an additional $750 million and we thank our shareholders for their ongoing support of the bank and its future,” Mr McEwan said.
NAB had initially asked investors for $3.5 billion in capital to strengthen its buffer against COVID-19-related losses when it released its first-half results in April.
It completed its $3 billion institutional raise the day after the results were published.
The bank’s earnings had fallen by 51 per cent year-on-year, with it responding by cutting the fixed remuneration of executives by 20 per cent and docking its dividend by almost two-thirds.
Earlier this month, the bank reported it had provided 120,000 loan deferrals and granted more than $370 million in loans to small businesses as part of the government’s SME Loan Guarantee Scheme in response to COVID-19.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
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