May 27 2008

OCBC Bank to Raise Funds From Preference Shares

Published by lioninvestor at 1:39 am under Shares

Hot on the heel of DBS, OCBC has announced that they will be issuing as much as $1.5 billion dollars worth of preference shares.

However, unlike DBS, OCBC’s offer will be open to retail investors. Back in 2003, it had done the same with the shares having a dividend yield of 4.2%.

The question to ponder is, “why are the banks raising capital at this time?”

At the end of March, OCBC had a healthy tier one capital ratio of 12.2%, DBS had 9.2% while UOB had 9.9%. The regulatory requirement for tier one capital is only 6%.

Perhaps they see a way to put the raised capital to some good use.

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4 Responses to “OCBC Bank to Raise Funds From Preference Shares”

  1. # littleon 28 May 2008 at 12:16 am

    Hi, I’m a newbie to investment. How/where do we apply for these preference shares or do I have to own an OCBC stock first?

  2. # lioninvestoron 28 May 2008 at 6:00 pm

    Hi Little,

    If they make it available to retail investors, then it should be through methods similar to IPOs.

    ie. ATM applications or placement through your brokers.

    I’ll keep a lookout and update the site accordingly.

  3. # greenon 15 Aug 2008 at 9:12 am

    Hi, when is the period/deadline for atm applications?

  4. # lioninvestoron 15 Aug 2008 at 2:44 pm

    Hi Green,

    You can refer to this post for details of the latest offering.

    http://www.lioninvestor.com/ocbc-to-raise-preference-shares-again/

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