(14 October 2015 – Australia) Westpac Banking Corporation has indicate that it will call on investors to raise A$3.5 billion, as part of a capital raising designed to boost the lender’s capital position.
Westpac also revealed its preliminary full-year results, with statutory net profit rising 6 per cent to $8.012bn and cash earnings lifting 3 per cent to A$7.82 billion.
The raising will comprise an institutional offer over a two-day period from today, as well as a retail offer, which will open on October 23 and close on November 11.
The equity raised will add around 100 basis points to the lender’s common equity CET1 capital ratio, placing it within the top quartile of banks globally.
Westpac chief executive Brian Hartzer said the full-year results were driven by a solid operating performance, supported by strong gains in customer numbers.
In addition, Westpac announced that its owner occupier home loan variable rates will increase by 20 basis points to 5.68 per cent on November 20, when residential investment property loan rates will go up by the same amount to 5.95 per cent.
Westpac consumer bank chief executive George Frazis said “This is a difficult decision and one that is not taken lightly. We acknowledge that it does impact customers, even in an environment where interest rates remain near historic lows. We have sought to carefully balance the needs of our borrowers, depositors and our shareholders, as well as the competitive market we operate in. Increases in the cost of doing business inevitably influence business decisions, including price”