Australia and New Zealand Banking Group Ltd. (ANZ.AU) said Thursday that it raised A$2.2 billion in new equity through its share purchase plan - significantly more than originally flagged.

In a statement, Melbourne-based ANZ said that "following outstanding support" it will accept all applications from retail shareholders for new shares. The share purchase plan comes after the group raised A$2.5 billion through an institutional placement in late May.

When it first announced the institutional placement and outlined details of the share purchase plan in May, ANZ said that it reserved the right to scale back share purchase plan applications if total demand exceeded A$350 million.

ANZ Bank shares fell after the details of the higher-than-expected share purchase plan issue were announced. ANZ closed Thursday down 2.8% or 45 cents at A$15.85. Prior to the announcement, ANZ was trading at A$16.30.

"The size of the SPP makes it the most successful undertaken by an Australian company and represents a strong endorsement of ANZ's super regional strategy," ANZ Chief Executive Mike Smith said in Thursday's statement.

The bank said the extra capital will provide increased financial flexibility to pursue strategic and organic opportunities, and further strengthen its capital position.

It said its talks to buy some of Royal Bank of Scotland Group Plc's (RBS.LN) retail and commercial banking assets are progressing but remain incomplete.

ANZ hasn't named which countries it wants to buy in but Smith recently said that the lender is targeting general growth in countries including Taiwan, Hong Kong, Singapore, Indonesia and Vietnam.

Traders said the bigger-than-expected share purchase plan will boost ANZ's Tier 1 capital position to 9.5%, and will give it enough cash to buy any RBS assets it wants, with money to spare.

One trader said speculation immediately shifted to Suncorp-Metway Ltd. (SUN.AU), which could be open to offers for its banking arm, even though ANZ has said its focus is on Asia. Suncorp shares closed up 4.5% at A$6.48.

ANZ also said that, while the economic outlook remains subdued and unpredictable, it is sticking to its previous guidance on bad debt provisioning. It said in late May that it expects its second half provisioning charge to be around 20% higher than the A$1.435 billion charge booked for the six months to March 31.

-By Lyndal McFarland, Dow Jones Newswires; 61-3-9292-2093; lyndal.mcfarland@dowjones.com
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