* OCBC acquired Wing Hang in deal worth almost $5 bln
* Says further capital raising remains an option
* Rights issue priced 25 pct below its last closing price
* Fourth-biggest equity capital raising in Asia this year
(Recasts on outlook for more capital raising)
By Saeed Azhar
SINGAPORE, Aug 18 Oversea-Chinese Banking Corp
, Singapore's second-biggest lender, plans to raise
$2.7 billion from existing shareholders to boost capital after
it acquired Hong Kong's Wing Hang Bank Ltd, and said it may look
at more fund-raising.
The plan, Asia's fourth-biggest equity capital raising this
year, will lift the bank's capital comfortably above Basel III
levels due to come into effect in 2019, but OCBC will still lag
"Capital raising continues to be an option," Chief Financial
Officer Darren Tan told reporters via video link from Hong Kong,
adding that the bank may consider scrip dividends. OCBC Chief
Executive Samuel Tsien said the bank could also look at non-core
OCBC said it will sell 440 million shares at S$7.65 a share,
a 25 percent discount to its last share price of S$10.20 on
Friday. It will offer one rights share for every eight existing
ordinary shares held.
Tan said the bank's common tier 1 capital ratio will be 13.2
percent after the rights issue. Once Basel III bank capital
rules are applied, the bank's tier one ratio will be 10.2
percent - above the 9 percent required.
Macquarie analyst Thomas Stoegner said in a note to clients
that OCBC's "pro forma" core equity tier 1 ratio - which takes
into account the new capital rules - was below DBS Group
Holdings and United Overseas Bank which have
levels of more than 12 percent.
"The rights issue addresses around half of the pro-forma
capital shortfall in our view," Stoegner noted.
OCBC took over Wing Hang Bank Ltd in a deal worth almost $5
billion, seeking a gateway to the Greater China region.
Tsien noted the Wing Hang deal will give the Singapore
lender 120 branches in Hong Kong, Macau, China and Taiwan. Wing
Hang has branches in five of the nine cities in the Pearl River
Delta region in southern China, an area whose GDP is as large as
Indonesia's GDP, he said.
Bank of America Merrill Lynch, HSBC and JPMorgan are
handling the share sale for OCBC, it said.
OCBC shares were down 0.1 percent in late afternoon trade.
(1 US dollar = 1.2448 Singapore dollar)
(Editing by Edwina Gibbs)