National Australia Bank shocked markets with a A$993m sale of shares. Story Tools
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SYDNEY, Australia (CNN) -- National Australia Bank shares have jumped 83c, or 2.8 percent, in early trading Wednesday after the besieged institution said it had raised almost Aust. $1 billion ($774 million) in asset sales overnight.
NAB, Australia's biggest bank, has investments in Britain, New Zealand and Asia and A$377 billion in assets.
Late Tuesday it announced it sold strategic holdings in three Australian financial institutions, the blighted AMP, its UK spinoff HHG, and the successful home lender, St George Bank.
The bank is already battling to recover from a foreign exchange trading scandal that it says will cost it about A$360 million.
The NAB's dumping of its stakes in AMP and St George shocked the market and analysts.
Analysts had assumed NAB was holding AMP shares in preparation for building further its highly successful MLC wealth management business.
NAB wound up with a 2.25 percent AMP stake last August after an unsuccessful market raid that was designed to win about 15 percent of Australia's biggest life insurer and funds manager.
NAB said in a statement Wednesday it had grossed A$993.2 million ($774 million) from the share sales to Merrill Lynch. The net profit is A$322 million.
A separate statement said an "in-principle" decision had been taken by NAB management late last year to "dispose of the shareholdings subject to market conditions".
The market immediately gave NAB a big tick. Its share price Wednesday climbed 83c to $30.28.
However, the once triumphant bellwether AMP slumped 16c to $4.47, St George lost 63c to $19.47 but HHG firmed three cents to $1.09.
The benchmark S&P/ASX 200 index was 25.4 points weaker at 3286.7 in early trade Wednesday.
NAB confessed Tuesday it had lost A$360 million in rogue foreign exchange trades since October that had erroneously bet the Australian and New Zealand currencies would fall against the dollar. (Full story)
The trades, which continued until January 13, resulted in the suspension of four traders and a post-tax loss of A$252 million.
The market had feared the forex foray was going to cost NAB up to A$600 million.
NAB chief executive Frank Cicutto, who led an internal review of the forex fiasco, refused to clarify to reporters how the loss had been calculated but said "gaps" in processes had been closed to ensure there could be no repeat of rogue trading.
