UPDATE 5-ANZ raises $2 bln for RBS Asia as rivals cool

* HSBC, StanChart didn't bid for all RBS Asia assets-sources

* ANZ submits non-binding bid, raises $2 bln

* ANZ offers shares at A$14.40 each, discount of 7.5 pct (Adds more source comments, details)

By Victoria Howley and Mette Fraende

LONDON/SYDNEY, May 27 (Reuters) - Australia and New Zealand Banking Group (ANZ.AX) moved into pole position to buy Royal Bank of Scotland's (RBS.L) Asian assets, raising almost $2 billion as interest from two rival suitors cooled.

Neither HSBC Holdings (HSBA.L) nor Standard Chartered (STAN.L) submitted offers for all of RBS's Asian assets by a deadline of around May 21, people familiar with the situation said on Wednesday [ID:nWLA5217] [ID:nWLA5227].

ANZ (ANZ.AX), Australia's fourth-largest lender, in contrast said it had submitted a non-binding bid and had raised A$2.5 billion ($2 billion) in a share sale to fund the acquisition, as well as strengthen its balance sheet.

HSBC and Standard Chartered could still show interest if terms are changed or businesses such as those in India are sold separately, though RBS has said it prefers to sell the assets together. Discussions were continuing with HSBC and Standard Chartered, people familiar with the situation said.

The trio of banks had been the only reported contenders to buy the assets, which were expected by analysts to fetch between $750 million and $1.5 billion.

HSBC and Standard Chartered declined to comment. RBS referred to comments by its chief executive earlier this month that the bank expected to complete the sale over the summer.

The assets for sale include operations and licenses in India, Pakistan, Indonesia, Taiwan and other retail and commercial banking operations in several other countries.

The share issue makes ANZ the last of Australia's major four banks to tap shareholders in an equity raising, following A$8.9 billion worth of share sales by its rivals since November last year, including investment bank Macquarie Group (MQG.AX) which raised A$540 million earlier this month.

"They've timed it very well. The short selling ban is off and it was a strong market overnight," said Donald Williams, chief investment officer at Platypus Asset Management.

INSTITUTIONAL SUPPORT

RBS, 70 percent owned by the British government, has put the assets up for sale as part of a plan to retreat to its home market and exit or shrink in up to 36 other countries.

The auction offers licenses and a foothold in some hard to access markets, although concerns have increased about regulatory complexity. Also bad debts could rise as recession deepens, especially on unsecured loan books, and more capital could need to be injected, industry sources said.

A deal would be more significant for ANZ than for HSBC and Standard Chartered, who already have a big presence across Asia.

"For ANZ, it's a big move for them into Asia. They have aspirations to be an Asian bank. So in some ways, there's more value here for ANZ than HSBC or Standard Chartered," said Peter Tebbutt, a senior director for Fitch Ratings, who covers banks.

Australia's largest banks have not been hit as hard by the financial crisis as many of its U.S. and European peers but they have been forced to issue equity and debt in recent months.

Banks have been somewhat shielded by their limited exposure outside Australia and their lack of exposure to toxic assets, but Australia is now considered to be in recession and the jobless rate is expected to jump.

It is 5-1/2 years since ANZ last turned to shareholders with a rights issue. In November 2003 it raised A$3.6 billion to acquire National Bank of New Zealand.

ANZ said it sold shares at A$14.40 each, a discount of 7.5 percent to the stock's closing price of A$15.57 on Tuesday. Trading in its stock was suspended on Wednesday and was set to restart on Thursday.

Investors would be focusing on the longer-term advantage of participating in the share issue.

ANZ gave its retail shareholders the chance to buy additional shares, raising up to around A$350 million.

It said some of the money would also be used to bolster its balance sheet, saying bad debt charges were likely to be about 20 percent higher in the second half of its fiscal year than in the first half when charges were A$1.44 billion. [ID:nSYD432219]

ANZ shares have risen 1.8 percent since the start of this year, underperforming a 2.6 percent rise in the benchmark S&P/ASX 200 index. (Additional reporting by Cecile Lefort in Sydney, Steve Slater in London and Michael Flaherty in Hong Kong; Editing by David Holmes and Rupert Winchester) ($1=1.284 Australian Dollar)