Tuesday, July 07, 2020

KBank set to buy back 24m shares to solidify capital

Jan 30. 2020
Banthoon Lamsam
Banthoon Lamsam
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By THE NATION

Kasikornbank is preparing to repurchase 23.93 million shares at a lower price and pay a dividend, it announced on Thursday (January 30).

The bank said it would use excess liquidity to repurchase up to Bt4.6 billion worth of shares, ensuring a strong capital fund and sufficient liquidity to support long-term operations.

The dividend payment from 2019 operating results will be Bt5 per share, up from Bt4 in 2018.

Chairman Banthoon Lamsam said directors had approved the repurchase in order to manage liquidity for the utmost benefit to the bank and its shareholders, with the number of shares not exceeding 1 per cent of the total paid-up capital.

The repurchase will be conducted on 10 consecutive business days beginning on February 14.

The repurchase price must not exceed the average closing price in the five consecutive business days prior to each repurchase date, plus 15 per cent of the average closing price.

KBank also has a capital adequacy ratio of at 19.62 per cent, sufficiently sturdy to support the implementation of strategic plans and businesses, Basel IV, and factors with potential future impacts.

And it still has sufficient financial liquidity with unappropriated retained earnings of up to Bt299.2 billion. 

The share repurchase will lower the bank’s liquid assets and the book value of the shareholders’ equity and enable it to maximise efficiency of its excess liquidity and capital management.

Liquid assets and equity book value will be lowered by the amount equivalent to the repurchased amount, raising the return on equity and the earning per share ratios.

The directors might later decide to resell the repurchased shares through the SET or a public offering, whichever is more appropriate at the time. This would take place between six months and three years of completing the repurchase.

The directors resolved to concur with the dividend payment from 2019 operating results to ordinary shareholders at the rate of B5 per share, of which the bank paid an interim dividend of Bt0.50 per share last September 26.

The bank will on April 10 announced the names of shareholders entitled to be paid the remainder. The dividend payment will be discussed at the shareholders’ annual general meeting and payments will be made on April 30.

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