OCBC plans to raise S$3.3bn ($2.7bn) in fresh equity to help fund its push into China, Singapore’s second-largest bank by assets announced yesterday, undershooting the amount that it had been expected to raise.
The rights issue, which is being offered at a 25 per cent discount to Friday’s closing price, will help pay for the bank’s $5bn purchase of Wing Hang, a Hong-Kong-based bank with a presence in southern China.
OCBC intends to use the deal to boost its existing presence in the mainland and establish a platform for better capturing the growing trade flows between China and its southeast Asia home.
The deal is Singapore’s second-largest rights issue, according to Dealogic. Analysts had speculated that OCBC, traditionally a bank with one of the strongest capital bases, might tap investors for more to further boost its cushion.
Samuel Tsien, the bank’s chief executive, told the Financial Times that the amount being raised was “always in the ballpark”.
The bank has already pulled in cash through two US$1bn sales of subordinated debt this year. At the end of last year, it also offered a scrip dividend which freed up S$486m.
“We then looked at the shortfall and on an absolute dollar basis, it was only S$3bn or so. This was always the proportion we had in mind,” said Mr Tsien.
After the acquisition and the rights issue, OCBC will have a common equity tier one ratio of 13.2 per cent under current regulatory standards, still higher than many peers. But the full Basel III reforms, which come into force in 2019, will strip out items such as the goodwill paid for Wing Hang from the core measure of capital strength.
On a so-called “fully loaded” Basel III basis, OCBC’s ratio drops to 9.9 per cent, according to Kevin Kwek, senior analyst at Bernstein Research in Singapore. That is close to the minimum 9 per cent required in Singapore and leaves it far short of competitor DBS’s 12.2 per cent.
新加坡伯恩斯坦研究公司(Bernstein Research)的高级分析师Kevin Kwek表示，按照所谓的“完全版”巴塞尔III规则，华侨银行的一级资本充足率将降至9.9%。这接近新加坡规定的最低标准9%，远低于星展银行(DBS)的12.2%。
Mr Tsien said the bank would move over time to improve the ratio by reducing its risk-weighted assets – the denominator against which capital is measured – and selling non-core assets.
“Over the next few years we will also have continued profits from our normal operations and increased profit from Wing Hang Bank as well,” he added. “Our retained earnings will also build up, which will shore up our capital base.”
OCBC’s shares closed unchanged from Friday at S$10.20.
Bank of America, HSBC and JPMorgan will manage the offer. The new shares are due to begin trading by the end of September.
负责此次配股的投行为美国银行(Bank of America)、汇丰(HSBC)和摩根大通(JPMorgan)。新股预计将从9月底开始交易。