ANZ Limited (ASX:ANZ) plans to raise $750 million via a convertible preference share issue, in a move to improve the company’s Tier 1 capital.

The company’s Tier 1 capital has been reduced significantly over the last six months, following redemptions totaling around $1 billion, ANZ told investors.

The proceeds will qualify as Tier 1 capital – the figure most commonly used to judge banks’ ability to protect its bank deposits.

The preference shares will convert into ordinary shares on December 15, 2016.