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NAB $27.72

short term support line not lookin so good

  1. infonet

    465 Posts.

    What with the NAB terminating the $600M share buyback, and the possibility of raising additional Capital.

    The support at 3120 is now NOT lookin good.


    National Australia Bank has terminated its $600 million share buyback and may have to raise new capital after being hit by the toughest ever penalties laid against a major Australian financial institutionby the Australian Prudential Regulation Authority.

    The bank has been forced to raise its internal target capital adequacy ratio to 10 per cent and will no longer be allowed to use its internal model to determine market risk capital.

    The measures, included in a damning report from Apra in the wake of the $360 million foreign exchange trading scandal, forced the bank to terminate its $600 million share buyback on Wednesday.

    At September 30, 2003, NAB had a total capital adequacy ratio of 9.7 per cent, with the bank holding $24.5 billion of regulatory capital against risk weighted assets of $252 billion.

    On those numbers, NAB would need at least another $770 million to get to 10 per cent, but since September 30, its balance sheet has grown (helped by the sale of its stake in St George Bank) and it has been a conducting a share buyback with a target capital ratio of 9.5 per cent.

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