Is executive pay behind CBA’s capital raising?

Companies usually announce capital raisings when they’re in financial trouble or are on the cusp of a substantial takeover. Australia’s banks, all of which are announcing near-record profits and large capital raisings, face neither of these things. What’s going on?

After announcing the largest-ever profit by an Australian bank, CBA (ASX:CBA), like ANZ and NAB before it, yesterday also notified investors of a rights issue of $5bn.

This unusual. A company that makes $9.1bn doesn’t normally hit investors up for another $5bn in a capital raising. But this is the Australian banking sector, where things are never quite what they seem.

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