CIMB Group Holdings Bhd is said to be hiring Rafe Haneef from HSBC Amanah Malaysia Bhd to lead its Islamic banking unit.
KUALA LUMPUR: The proposed dividend-in-specie distribution of PT Bank CIMB Niaga Tbk (Niaga) shares to CIMB Group
Holdings Bhd’s shareholders translates to about 2 sen per CIMB Group share or a 0.5% yield, according to Maybank Investment Bank Research.
It said the dividend was in addition to the 4.1% that the research house was projecting for FY16.
“We estimate a marginal 1.2% reduction in FY17 group earnings stemming from the 5.4 percentage point decline in the group’s shareholding in Niaga to 92.5%. We maintain our ‘sell’ call with an unchanged target price of RM4.10 (FY17 price-to-book value (P/BV) of 0.8 times, 8.9% return on equity),” Maybank said.
On Wednesday, CIMB Group proposed a special interim dividend, to be paid in PT Bank CIMB Niaga Tbk shares, to increase the public float of its Indonesian subsidiary with the aim of complying with the Indonesia Stock Exchange (IDX) listing regulations.
CIMB Group said it proposed to distribute 1.367 billion existing Niaga Class B shares (dividend shares), or about 5.44% equity interest in CIMB Niaga, to its shareholders on an entitlement date to be later determined.
CIMB Niaga, in which CIMB Group owns a 97.94% stake through two wholly-owned subsidiaries, currently does no comply IDX’s requirement of at least 7.5% of total issued and paid-up shares being held by public shareholders.
Maybank said the distribution was expected to have a slight dilutive impact on CIMB Group’s capital ratios with an 8 basis points dip in its transitional common equity tier one ratio as at
end-2015 to 10.23% from 10.31%.
“From an earnings perspective, we estimate a marginal 1.2% reduction in CIMB Group’s FY17 net profit from the group’s reduced stake in Niaga. We maintain our earnings forecasts,” it added.
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