Westpac retail capital raising smashes target despite scandal

Westpac has exceeded its capital raise target by $270 million despite more than 3000 retail investors dropping out following allegations the bank failed to properly vet 23 million transactions, some of which were linked to child exploitation in the Philippines.

Westpac was aiming to raise $500 million from retail investors as part of a $2.5 billion raise. Retail investors could apply for up to $30,000 of shares at a price determined by the weighted average price over a five trading day period, under the bank’s Share Purchase Plan (SPP).

Westpac outperforms expectations in retail capital raising.
Westpac outperforms expectations in retail capital raising. Credit: Mark Metcalfe

The share price for retail investors ended at $24.20 and the bank had applications from 40,900 shareholders who raised a total of $770 million.

Westpac launched a capital raising in early November to strengthen its balance sheet. The raising was split between a $2 billion institutional placement and $500 million from smaller investors.


Institutional investors bought shares at a fixed price of $25.32 per share.

As the AUSTRAC money-laundering scandal enveloped the bank, Westpac allowed retailers to withdraw orders to buy new shares. Over eight days, $68 million was wiped from Westpac’s books.

But some stockbrokers, including Bell Potter, advised shareholders to buy into the raising as the “AUSTRAC developments have made the likely issue price of SPP shares more attractive”.

The SPP was available to 618,300 eligible shareholders and 40,900 of these signed up.

The 31.9 million new shares will be issued on December 11, 2019 with trading expected to start the following day.

Westpac’s share price closed at $24.21 on Tuesday.

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Source: Thanks smh.com