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NAB to raise $3.5 billion as earnings fall
One of Australia’s largest banks has launched a multibillion-dollar capital raising, as well as slashed dividends and executive pay, as the fallout from COVID-19 affects its bottom line.
NAB to raise $3.5 billion as earnings fall
One of Australia’s largest banks has launched a multibillion-dollar capital raising, as well as slashed dividends and executive pay, as the fallout from COVID-19 affects its bottom line.
NAB has announced a trading halt as the bank prepares to undertake a capital raising.
The big four bank announced a 51 per cent decrease in half-yearly net cash profit to $1.44 billion, with a net profit of $1.31 billion.
NAB slashed the fixed remuneration of its executives by 20 per cent and its interim dividend to 30 cents a share.
“We acknowledge you are feeling the pain of significant recent drops in the value of your investments across the market,” CEO Ross McEwan said in a letter to shareholders. “Many of you rely on investments for your livelihood, particularly in retirement. We also know that reducing the 2020 interim dividend to 30 cents per share has a direct impact on our shareholders, and those invested in NAB through their superannuation.”
“These actions are intended to provide us with sufficient capacity to continue supporting our customers through the challenging times ahead, as well as increasing our capital level to assist to manage through a range of possible scenarios, including a prolonged and severe economic downturn.”
The bank also launched a $3 billion capital raising in order to strengthen its buffer against credit losses.
Macquarie Bank and Goldman Sachs will lead the capital raising undertaken by the bank.
nestegg has taken a look at what recapitalisations can mean for shareholders, here.
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