Maybank group president & CEO Datuk Abdul Farid Alias said the banking group's strong franchise and resilient balance sheet enabled it to ride through the challenging period over the last few quarters.
KUALA LUMPUR: The current softer equities market has seen Malayan Banking Bhd
's (Maybank) cancelling its dividend reinvestment plan (DRP) and it would now pay out the final dividend of RM3.50bil this Friday.
The country's largest bank by assets said on Monday the board of directors had resolved to exercise its right not to go ahead with the 16th DRP due to the current softer equities market which had also affected its share price.
Maybank group president and CEO Datuk Abdul Farid Alias said the decision was in the best interest of its shareholders of Maybank and the group’s capital requirements at this time.
Farid said the Maybank share price throughout the DRP election period from June 11 to 26 was lower than the price of the new Maybank shares to be issued under the 16th DRP at RM10 each.
At midday on Monday, the share price was up one sen to RM9.01.
Hence, he added “the board is of the view that a full cash dividend would offer shareholders better value at this point of time”.
Shareholders would now receive an all-cash final single-tier dividend of 32 sen per share for the financial year ended Dec 31, 2017.
Shareholders who had opted for the DRP and paid the RM10 stamp duty would be reimbursed the RM10 fee by Maybank.
Farid said the cancellation of the 16th DRP won't impact the group's performance or its capital structure and/or requirements, nor its issued share capital, earnings per share, net assets per share, gearing and substantial shareholders’ shareholdings.
“Maybank remains among the region’s best capitalised banks with its CET1 ratio at 13.37% and total capital ratio of 18.12% (after final cash dividend) as at end March 2018, which is more than sufficient to support its growth and regulatory requirements.”
Farid stated while the DRP was cancelled on this occasion, it would continue to be an integral part of the group’s strategy for sound capital management.
He added it would continue in the future where relevant, given that it offers sufficient flexibility to shareholders as well as the group.
“We are firmly committed in ensuring a market-competitive dividend for our shareholders complemented by strategic planning of our capital requirements, which are essential in creating the next chapter of growth.
“Our stature as one of the leading regional banking groups is founded on and strengthened through our relevance and value created for our stakeholders consistently over the years,” he said.
