NAB Launches A$3.5 Billion Capital Raising, Slashes Interim Divided
By Alice Uribe
SYDNEY--National Australia Bank Ltd. has launched a 3.5 billion
Australian dollar (US$2.23 billion) capital raising, while also
slashing its interim dividend by 64% as it responds to upheaval
caused by the coronavirus pandemic.
NAB, one of Australia's largest lenders, said it would raise A$3
billion from a placement of shares to institutional investors and
seek to raise a further A$500 million from a Share Purchase Plan.
New shares would be issued at A$14.15 each, representing a 10%
discount to Friday's closing price.
On Monday, NAB also reported a 51% drop in cash earnings for the
six months through March to A$1.44 billion. The result was dragged
down by A$1.04 billion in one-off charges, including higher credit
impairment charges and mark-to-market losses on its liquids
portfolio within Markets and Treasury.
The bank said it would cut its interim dividend by 65% to 30
cents per share. It also increased collective provisions by A$828
million to A$2.14 billion.
"We entered this challenging period in a robust position, with
capital, funding and liquidity significantly strengthened over
recent years," said Chief Executive Ross McEwan. "However, given
the uncertain outlook, we have taken proactive steps to further
strengthen our balance sheet."
The bank said the capital raising would increase its proforma
CET1 ratio to 11.2%, while the decision to reduce its interim
dividend is equivalent to another A$1.6 billion or 37 basis points
NAB's chairman and directors will forego 20% of their base fees
for the second half of fiscal 2020, while Mr. McEwan will forego
20% of his fixed remuneration for the second half.
Write to Alice Uribe at email@example.com
(END) Dow Jones Newswires
April 26, 2020 19:14 ET (23:14 GMT)
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