The Commonwealth Bank has announced a $5 billion capital raising as it unveiled a record $9.14 billion cash profit.
The profit result is up five per cent from last year's $8.68 billion result and is largely in line with expectations. Total dividend for the year was A$4.20, an increase of 5 percent.
CBA, the country's No. 2 lender by assets, announced a fully underwritten 1-for-23 rights issue at an offer price of A$71.50, a 12.9 percent discount to its last trading price. This brings the total funds raised by Australia's major banks since May to $A17 billion.
Meanwhile, the bank will tap shareholders for $5 billion though a renounceable entitlement offer aimed at lifting its capital reserves.
The capital raising is the second largest in Australia's history, after National Australia Bank did a A$5.5 billion rights issue in May.
CBA will issue about 71 million new shares, following which its Tier-1 ratio will jump to 14.3 per cent on an internationally comparable basis, the highest among Australia's "Big Four" lenders.
The lender was raising capital after regulators ordered Australia's major banks to keep aside a bigger cash buffer against their oversized mortgage books, following sharp rises in Sydney and Melbourne house prices over the past two years.
Earlier this month, ANZ Banking Group tapped investors for A$3 billion in an institutional share placement while Westpac Banking Corp raised A$1.25 billion through a hybrid issue.
CBA said net interest margin, a main gauge of profitability for banks, fell 5 basis points to 2.09 percent.
Expense grew 5 percent from a year ago because of staff expenses, the impact of a lower Australian dollar and growing regulatory, compliance and remediation costs.
Total provisions for impairment losses decreased 7 percent to A$3.65 billion.
CBA follows a different calendar to its peers, which report third-quarter numbers this month. NAB posted a 9 percent growth in unaudited cash profit amid lower bad debt charges while ANZ flagged a spike in bad debts in its brief update last week.
Shares in CBA, valued at A$134 billion, are down about 4 percent so far this year while the broader S&P/ASX200 index has gained 1 percent this year.
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