Interesting. I guess they figured there was a good chance others like CBA / ANZ / Westpac may raise capital with their results and wanted to get in first.
Last year they were ANZ (1st May), WBC (6th May), CBA (15th May).
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Taste of things to come, what the betting that all of the Aust banks big and small will follow ?
I find this quite interesting. I generally don't worry about Aussie banks, no franking credits etc, but based on the above they may all be seeking over $10 billion. Where will it come from when credit risks for clients are increasing and dividends are reducing. Sure, share prices seem to have dropped significantly so room for growth but still 10 billion is a lot
NAB divident cut and capital raising where flagged by Morgan Stanley back in December, I don't recall the exact amount for dividends but the capital raising looks close to what was forecast. NAB is the least efficient of the big four Australasian banks by many metrics, I suspect that Ross McEwan was hired from RBS for that reason.
The entire industry will need to make cuts. Lending margins will be far lower in the future, credit growth slowed for a couple of years and NPLs will blow out. Luckily large banks tend to have a lot they can cut without touching revenue generating operations.
Aussie super funds have a lot of bank shares and won't take kindly to seeing their investments being diluted, or alternatively, stuck for capital. I'm picking that there's a lot of cash prepared to subscribe for cut-price bank shares if there's anything left over from the expected capital raisings.
Some Aussie banks now trading at quite a big discount to NTA, e.g. :-
Bank of Queensland BOQ $4.63, last reported NTA $7.26 = 64% of NTA
Bendigo Bank BEN $5.69, last reported NTA $8.10 = 70% of NTA
ANZ $15.65, last reported NTA $19.59 = 80% of NTA
We know banks do not do well in a recession but HGH is currently trading at 107% of NTA - Something to ponder, is that warranted in the circumstances ?
half a billion in extra software amortization for NAB this half. but even including that they still only 'charged' a similar amount against earnings to last half and yet the profit is down a lot.
For an insight into why Barramundi have increased their weighting of Australian banks, see Pennypicker's post on the BRM thread.