Bank of Queensland share price dips as $339m in capital is raised

Bank of Queensland share price: capital raise in focus

The Bank of Queensland (ASX: BOQ) today announced that it had finalised its share purchase plan (SPP) – raising $89.7m in the process. This brings the total amount of capital BOQ has raised over the last couple of months from institutional and Eligible Shareholders to $339.7m.

This comes a little more than a month after the bank announced that it had completed the $250m institutional portion of its planned capital raise.

Detailing the outcome on the SPP, the Bank of Queensland commented that:

'A total of approximately $89.7 million was raised under the SPP, with approximately 12.3 million ordinary shares (Shares) to be issued at an issue price of $7.27 per Share.

This, the bank further noted:

'Represents a 2% discount to the VWAP [volume weighted average price] of BOQ shares traded on ASX between 12 December 2019 and 20 December 2019 (inclusive).’

Ultimately, this represents a significantly larger Share Purchase Plan offering than previously announced, with BOQ writing on their website on November 25 that under a non-underwritten SPP, the bank ‘is targeting to raise approximately $25 million.’

At the end of the day, BOQ did not scale back the SPP, accepting valid applications from ~6,803 eligible shareholders, the bank wrote today.

Finally, the bank said that it expected these SPP shares to be issued on Thursday, January 2; and to be tradable on the following day, January 3.

Amid a broad market decline this morning, the BOQ share price fell as much as 1.0%. By the late afternoon however it had pared back these early losses, closing the day out at $7.36 per share – down just 0.47%.

2019: the year that was

Ultimately, this caps off a difficult year for the Bank of Queensland – with its share price down some 22% year-to-date.

Even so, both the institutional portion of the raise ($250m) and the now-completed SPP portion ($89.7m) will help to shore up BOQ’s capital position. Indeed, as the bank itself pointed out post-institutional raise:

'We are pleased with the strong support from investors. The funds raised will further increase BOQ's buffer above APRA's "unquestionably strong" benchmark and provide BOQ with additional capacity to support implementation of our strategic transformation.'

Lastly, as BOQ was keen to point out as part of its AGM held earlier in December – the bank’s asset quality remains sound, its balance sheet solid and its niche business segments represent a number of growth opportunities.

In saying that, the bank did flag rising cost structures and retail bank performance as ‘areas requiring attention' during its AGM.

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