Positive news for the banks and their shareholders continued today, as the Commonwealth Bank and St George bank both declared formidable gains from the sale of their Visa shares into Visa’s Initial Public Offering (IPO).
Banks all over the world freed up shares for the float, to allow Visa to proceed with the listing without issuing more shares, a step which would dilute the value of the shares of existing shareholders.
These two banks would undoubtedly be happy with the result, which were probably more than they expected, after Visa declared a highly successful listing on the New York Stock Exchange overnight.
Today, the Commonwealth Bank declared a gain of $355 million after it sold 51% of its Visa shares into the IPO at the issue price of US$44 per share, as well as the fair value of the remaining shares held by the group under trading restrictions.
The gains will be used in the funding of its ‘strategic investment programme’, the group said in a statement.
St George said it is to realise a gain of $75 million before tax in its half-year results due out on Monday, in which it will be treated as a significant item.
In a statement to the market, St George said it remains on track to meet its EPS growth target of 10% in 2008.
The statement followed Westpac’s gain of $270 million last week, and ANZ’s $350 million gain.
National Australia Bank is yet to make a declaration, however it is anticipated it will post a figure as high as $200 million.
All major banks were up today, with the Commonwealth Bank gaining $3.26 or 8.3% to $42.56, ANZ rising $1.39 or 6% to $24.32, Westpac up 82 cents or 3.4% to $24.92, National Australia Bank up $1.59 to $30.70 and St George Bank adding $1.75 to $27.85.
