SCB gears for repurchase of a maximum of 135.96m shares
Siam Commercial Bank's Board of Directors approved a share repurchase programme to further improve its capital efficiency at a meeting today (March 11).
Under this programme, the bank shall use a maximum amount not exceeding Bt16 billion to repurchase shares not exceeding 135.96 million shares (equivalent to 4 per cent of paid-up shares). The share repurchase will be conducted through the Stock Exchange of Thailand during a period of six months from April 20,2020 to October 19, 2020.
Given its current market valuation, strong financial position, intrinsic earnings capabilities and lack of short-term investment opportunities the bank intends with this program to improve shareholders' return by 1) increasing Earnings per share (EPS), 2) Dividend per share (DPS), and 3) Return on Equity (ROE).
This programme is also expected to help the bank's stock price to better reflect its intrinsic value.
At the same time, given the option to sell back the shares after six months, the programme also provides the needed flexibility to explore and capitalise on new growth opportunities in the medium term which will yield appropriate shareholder returns. In the absence of those investment opportunities the bank has the option to retire the repurchased shares which again will drive better shareholders returns.
Chairman of the Executive Committee and CEO, stated:
"At SCB, we continuously drive for quality growth and enhance the bank's earning capabilities to drive long-term sustainable shareholder returns. At the same time, we are mindful of short-term return expectations especially with the impacts from the outbreak of the coronavirus disease. Given the fragility and high volatility of the external environment, short term investment opportunities might be challenging while in the medium term, even more situations might open up to deploy our capital productively. This significant programme gives us the flexibility to increase shareholder returns while maintaining our strategic flexibility. Given our strong capital position and earnings prospects we are confident that we have the funds to fully execute such an ambitious programme".
