Australia’s third largest lender, the National Australia Bank Ltd, has apparently requested investors for USD 2.2 billion (AUD 3.5 billion) along with asking them to cut its dividend. The current request stems from the fact that NAB’s first-half profit has fallen partly on account of the expenses associated with the coronavirus pandemic.

Earlier, the financial regulator requested banks to plausibly postpone shareholder payouts until the effect of COVID-19 was known more clearly, post which it has taken the decision to pay a dividend. Incidentally, NAB is the first bank in Australia to report its results ever since the virus ravaged the country.

If reports are to be believed, the planned capital raising, ever since the onset of the coronavirus, is the biggest by an Australian company. The bank has reduced its interim dividend from 83 cents per share (in the earlier first half) to 30 cents per share. It is likely that this decision may influence other lenders scheduled to report their profits next month.

Ross McEwan, Chief Executive Officer, National Australia Bank, has apparently acknowledged that retail stakeholders are in stock for the dividend and are certain to require the same. He also expressed his point of view on the current situation, stating that it would be difficult for anyone to predict the exact state of economic recovery post the COVID-19 situation.

For the record, McEwan has  reportedly taken a 20% cut in his base salary, reflecting the pandemic crisis.

The share of NAB were apparently in a trading halt as it looked to raise AUD 500 million from retail investors and AUD 3 billion from institutional investors. Also, shares of other lenders in competition with NAB, such as Westpac Banking Corp., Australia & New Zealand Banking Group Ltd., and Commonwealth Bank of Australia, fell over 2% in a flat overall market.

Source Credits: https://finance.yahoo.com/news/australias-nab-taps-investors-2-032206071.html