KUALA LUMPUR: Standard Chartered PLC announced a rights issue to raise approximately ''3.258 billion to accommodate an increase in effective capital ratio and to seize attractive growth opportunities.
It said on its website on Wednesday, Oct 13 the group enjoyed significant opportunities for further growth given the strength of its franchise across many of the world's fastest growing economies.
Standard Chartered said the board believed that under the current regulatory regime the group could sustain good growth whilst maintaining capital ratios broadly constant at their current strong levels through internal capital generation.
However, the regulatory environment remains in flux and the board believed that the group's principal regulators would raise requirements relating to minimum capital ratio levels, through revised definitions of capital and incorporating further regulatory buffers, and in addition may accelerate the transition timetable announced by the Basel Committee on Banking Supervision on Sept 12, 2010.
To accommodate such increases in effective capital ratios, the banking group said it may have to constrain risk-weighted asset growth, sacrificing attractive growth opportunities, unless new capital is raised.
'The purpose of this rights issue is therefore to enable the group to continue to seize the opportunities presented in the markets in which it operates, whilst being prepared for higher capital requirements,' it said.
Standard Chartered said the board believed it was prudent to assume the imposition of an accelerated timetable for the adoption of the new Basel III framework and that certain regulators were likely to take a conservative approach to the implementation of the new capital buffers, resulting in higher effective minimum capital requirements than have yet been announced.
Under the current regulatory framework, Basel II, Standard Chartered reported a Core Tier 1 Capital ratio of 9.0% as at June 30, 2010.
The board also estimated the impact of the rights Issue will be to increase the forecast Core Tier 1 Capital ratio by approximately 2%. The board also estimates that the impact of adjustments to risk-weighted assets and regulatory capital under both the proposed amendments to Basel II and introduction of Basel III will be to reduce the group's future Core Tier 1 Capital ratio by up to 1%.
'The rights issue will give the Group greater capacity to meet the Basel III countercyclical buffer and the enhanced capital requirements for systemically important institutions,' it said.
On the financial impact of the rights issue, it said as at June 30, 2010, Standard Chartered's Core Tier 1 Capital ratio was 9.0% on a Basel II basis and its total Tier 1 Capital ratio was 11.2%.
'The board estimates that the impact of the rights issue will be to increase the forecast Core Tier 1 Capital ratio and total Tier 1 Capital ratio by approximately 2%,' it said.
The new ordinary shares would be offered to all qualifying shareholders on the basis of one new ordinary share at 1,280 pence for every eight existing ordinary shares held.
The issue price for Hong Kong shareholders is HK$156.82 for each new share, calculated at an exchange rate of ''1:HK$12.2511 at 4.30 p.m. (UK time) on Oct 12.
It said on its website on Wednesday, Oct 13 the group enjoyed significant opportunities for further growth given the strength of its franchise across many of the world's fastest growing economies.
Standard Chartered said the board believed that under the current regulatory regime the group could sustain good growth whilst maintaining capital ratios broadly constant at their current strong levels through internal capital generation.
However, the regulatory environment remains in flux and the board believed that the group's principal regulators would raise requirements relating to minimum capital ratio levels, through revised definitions of capital and incorporating further regulatory buffers, and in addition may accelerate the transition timetable announced by the Basel Committee on Banking Supervision on Sept 12, 2010.
To accommodate such increases in effective capital ratios, the banking group said it may have to constrain risk-weighted asset growth, sacrificing attractive growth opportunities, unless new capital is raised.
'The purpose of this rights issue is therefore to enable the group to continue to seize the opportunities presented in the markets in which it operates, whilst being prepared for higher capital requirements,' it said.
Standard Chartered said the board believed it was prudent to assume the imposition of an accelerated timetable for the adoption of the new Basel III framework and that certain regulators were likely to take a conservative approach to the implementation of the new capital buffers, resulting in higher effective minimum capital requirements than have yet been announced.
Under the current regulatory framework, Basel II, Standard Chartered reported a Core Tier 1 Capital ratio of 9.0% as at June 30, 2010.
The board also estimated the impact of the rights Issue will be to increase the forecast Core Tier 1 Capital ratio by approximately 2%. The board also estimates that the impact of adjustments to risk-weighted assets and regulatory capital under both the proposed amendments to Basel II and introduction of Basel III will be to reduce the group's future Core Tier 1 Capital ratio by up to 1%.
'The rights issue will give the Group greater capacity to meet the Basel III countercyclical buffer and the enhanced capital requirements for systemically important institutions,' it said.
On the financial impact of the rights issue, it said as at June 30, 2010, Standard Chartered's Core Tier 1 Capital ratio was 9.0% on a Basel II basis and its total Tier 1 Capital ratio was 11.2%.
'The board estimates that the impact of the rights issue will be to increase the forecast Core Tier 1 Capital ratio and total Tier 1 Capital ratio by approximately 2%,' it said.
The new ordinary shares would be offered to all qualifying shareholders on the basis of one new ordinary share at 1,280 pence for every eight existing ordinary shares held.
The issue price for Hong Kong shareholders is HK$156.82 for each new share, calculated at an exchange rate of ''1:HK$12.2511 at 4.30 p.m. (UK time) on Oct 12.
No comments:
Post a Comment