NAB extends raise to $1.25bn

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.