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National Australia Bank increased the size of a share sale by 50 per cent to A$3 billion ($3.44 billion) to shore up capital.
"The initial placement size of A$2 billion was significantly oversubscribed," the Melbourne-based bank said yesterday.
National Australia is the parent company of BNZ in New Zealand. Standard & Poor's upgraded its outlook on the company's AA crediting rating to stable from negative.
Increasing the sale gives National Australia more room to weather a financial storm that has forced banks and securities firms worldwide to raise US$715 billion ($1200 billion) of funds.
Westpac and Australia & New Zealand Banking Group said they had no plans to raise more capital after their shares fell on concern that they would follow National Australia.
"It's symptomatic of the times, as banks shore up their capital base in the wash-up of this financial crisis," said Rob Patterson at Argo Investments in Adelaide. "There's plenty of cash around as investors wait for these new issues to get the discount."
National Australia's shares were halted while the sale was completed. They have slumped 49 per cent during the past 12 months, making the company the worst performer among the nation's seven biggest banks.
Last month the bank posted a 24 per cent drop in second-half profits to A$1.85 billion as funding costs rose and the company increased provisions for potential securities losses. Bad debts climbed A$1.7 billion to A$2.5 billion in fiscal 2008 as the company set aside A$1 billion for United States subprime-related debt obligations.
- BLOOMBERG