Westpac: $2.5 billion institutional placement in December 2008 at $16 a share followed by a share purchase plan in January 2009 that pulled in an additional $442 million so total of $2.94 billion raised. Paper profit of $1.543 billion based on Friday's close of $24.40, but only 15% or $232 million is attributable to retail investors.
Bank shareholders richest of them all
While ordinary Australians curse at having to suffer the world's most expensive banking system, even the lucky minority who invested in bank stocks after the last bad-debt crisis in the early 1990s have been getting ripped off by these financial giants.
If capital was raised fairly in Australia through renounceable rights issues, you wouldn't have the bizarre situation of retail investors directly owning about 40 per cent of our big banks but only pocketing $2.21 billion of the $8.6 billion in paper gains generated from big four capital raisings over the past year.
That said, Australians who own bank shares are clearly cashed up from the huge returns that have been generated over the past 15 years.
Witness the way more than 178,000 ANZ shareholders collectively stumped up a record $2.2 billion in its recent share purchase plan. The $669 million coughed up by Macquarie Group retail shareholders in June and the $865 million forked out in February's Commonwealth Bank SPP further demonstrated that Australian bank shareholders are a pretty wealthy lot.
Bank shareholders can afford to give customers more relief
My wife and I have each shelled out $15,000 for the NAB's $21.50 share purchase plan, which closes on Friday. If the share price holds and there is no scale back, that will deliver a quick paper gain of about $8700 and lift our capital raising profits for the year above $200,000
With windfalls like that, the lucky owners of Australian bank shares could easily afford some more relief being given to bank customers on top of the recent cuts in those outrageous exception fees.
And don't for a moment think bank fees have been coming down after the global financial crisis. The Commonwealth Bank used to only charge $1.25 for a cash advance on the credit card. Sure, we were still paying close to 20 per cent in interest straight away, but if it was just to plough into a capital raising offer for a few days, it didn't really matter.
Lo and behold, earlier this year CBA decided to bring their fees into line with the other big banks and started slugging customers 1.25 per cent of the cash advance as an up-front charge.
Therefore, if an NAB shareholder wanted to take out a $15,000 cash advance to plough into its SPP this week, that would be a fee of $234. It's absolute highway robbery – and that's on top of the exorbitant rates.
Bad debts coming down
The most important news in the Commonwealth Bank's full year result on Wednesday was that bad debts are starting to come down. In full-year terms, these CBA bad debt provisions look dreadful:
2001-02: $449 million
2002-03: $305 million
2003-04: $276 million
2004-05: $322 million
2005-06: $398 million
2006-07: $434 million
2007-08: $930 million
2008-09: $2.935 billion
But when you break it down into half years, it paints a different picture:
$195 million,
December 2006 half
$239 million, June 2007 half
$333 million, December 2007 half
$597 million, June 2008 half
$1.607 billion, December 2008 half
$1.328 billion, June 2009 half