It is being reported that Commonwealth Bank of Australia (ASX: CBA) will launch a massive capital raising when it announces its full-year earnings results this morning in a bid to bolster its capital position.
According to the Fairfax press, the bank could seek to raise $5 billion, or up to $5.1 billion, in which existing shareholders could receive the opportunity to buy 1 new share for every 23 they currently own.
The shares could be offered at a 10% discount to yesterday's closing price of $82.12, implying a price of around $73.91. Institutions will also be given two days to decide whether to take part in the institutional offer with the shares likely to be suspended from trade, possibly until early next week.
Commonwealth Bank will become the last big bank to raise capital after the Australian Prudential Regulation Authority, or APRA, announced stricter capital requirements late last month. Australia and New Zealand Banking Group (ASX: ANZ) announced a $3 billion raising just last week to adhere to the new standards, while National Australia Bank Ltd. (ASX: NAB) and Westpac Banking Corp (ASX: WBC) have also tapped the markets for more cash.
More details will be revealed when the bank releases its official results this morning – watch this space.
