January 21, 2009 / 11:16 PM / 9 years ago

UPDATE 2-RBC, Scotiabank up size of preferred share offer

(Adds increased size of offerings, updates shares)

TORONTO, Jan 21 (Reuters) - Two of Canada’s big banks said on Wednesday they each plan to raise C$250 million ($198 million) in a preferred share offering, a move other domestic banks have taken recently to bolster their capital positions.

Royal Bank of Canada and Bank of Nova Scotia both announced share offerings of 8 million units at midafternoon. After market close, both banks announced they had increased the size of their offerings.

Royal Bank (RY.TO), Canada’s biggest bank, said strong investor demand prompted it to increase the size of the offering to 10 million shares from 8 million.

The series will yield 6.25 percent annually, RBC said. Holders are entitled to a noncumulative quarterly fixed dividend for the initial period ending Feb. 24, 2014, in the amount of C$1.5625 a share.

RBC has also granted underwriters an option to purchase an additional 3 million preferred shares.

Bank of Nova Scotia (BNS.TO) increased its preferred share offering to 10 million shares from 8 million noncumulative five-year preferred shares with a face value of C$25 each.

Holders will be entitled to a noncumulative quarterly fixed dividend for the initial period ending April 25, 2014. The series will also yield 6.25 percent annually, the bank said.

Shares of Royal Bank rose 4.2 percent to close at C$32.12 on the Toronto Stock Exchange on Wednesday, while Scotiabank climbed 3.92 percent to C$29.70.

Earlier this month, Toronto-Dominion Bank (TD.TO) boosted the amount of its preferred share offering, as did National Bank of Canada (NA.TO).

Late last year, a number of domestic banks issued shares to boost their capital ratios, a measure of financial stability.

$1=$1.26 Canadian Reporting by Jennifer Kwan and Ka Yan Ng; editing by Rob Wilson

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