Bank of Queens­land share price falls

The Pak Banker - - FRONT PAGE -

BIRM­ING­HAM: The Bank of Queens­land share price has fallen sig­nif­i­cantly af­ter an­nounc­ing a now al­most-com­pleted $275 mil­lion cap­i­tal raise to the mar­ket last week. First it was West­pac and now it's the Bank of Queens­land (ASX: BOQ) tap­ping the cap­i­tal mar­kets.

Like West­pac: the Bank of Queens­land just re­cently an­nounced that it was look­ing to raise $275m in new cap­i­tal - split be­tween a fully-un­der­writ­ten $250m place­ment to in­sti­tu­tional in­vestors (now com­pleted) and an­other (yet to be fi­nalised) $25m from a share pur­chase plan (SPP) to el­i­gi­ble in­vestors.

Un­sur­pris­ingly and just like West­pac - BOQ's shares also fell steeply once the stock re­sumed trad­ing post-raise trad­ing halt. The day prior to the an­nounce­ment of this raise, for ex­am­ple, the Bank of Queens­land shares traded hands at the $8.640 mark. A trad­ing halt wouldn't slow mat­ters much, nor see bear­ish in­vestors ob­structed: once the stock opened af­ter the com­ple­ti­tion of the in­sti­tu­tional place­ment, it dove to a low of $8.070 per share dur­ing the day. Since then the stock has man­aged to fall fur­ther, with BOQ cur­rently trad­ing at $7.780 per share - some 9.9% lower than they did prior to the cap raise an­nounce­ment. Prac­tise trad­ing Aus­tralian bank stocks with an IG demo ac­count now

The Bank of Queens­land ar­tic­u­lated two pri­mary rea­sons for the $275m cap­i­tal raise. Specif­i­cally, it was noted that the funds would be used to: ' Strengthen BOQ's bal­ance sheet, pro­vide an in­creased buf­fer above the Aus­tralian Pru­den­tial Reg­u­la­tion Au­thor­ity's (APRA) "un­ques­tion­ably strong" Com­mon Equity Tier 1 (CET1) cap­i­tal ra­tio bench­mark and cre­ate ad­di­tional ca­pac­ity for BOQ to im­ple­ment its strate­gic pri­or­i­ties.' Af­ter all, as part of the bank's FY19 results, it was noted that BOQ's Com­mon Equity Tier 1 ra­tio stood at 9.04% - some­what be­low APRA's 'un­ques­tion­ably strong' re­quire­ment. In say­ing that and speak­ing of the out­look, BOQ noted dur­ing its FY19 pre­sen­ta­tion that the bank re­mained ap­pro­pri­ately cap­i­talised. In­deed, as was fur­ther ex­pli­cated, 'the Of­fer is ex­pected to add ap­prox­i­mately 80 to 88 ba­sis points to BOQ's Level 2 CET1 cap­i­tal ra­tio.'

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