Maybank cancels DRP due to softer market, to pay RM3.5 billion dividend
KUALA LUMPUR: Malayan Banking Bhd ( Maybank) announced yesterday that its Board of Directors has resolved to exercise its right not to proceed with the implementation of the 16th Dividend Reinvestment Plan ( DRP) given the current softer equities market which has also affected its share price.
Following this decision, shareholders will now receive an allcash final single-tier dividend of 32 sen per share for the financial year ended December 31, 2017, which will total up to some RM3.5 billion, to be paid on July 6, 2018, said Maybank.
Maybank group president & chief executive officer, Datuk Abdul Farid Alias said that the decision was taken by the Board after careful deliberation over what would be in the best interests of shareholders of Maybank as well as the group’s capital requirements at this time.
“Given that the prevailing market price of Maybank shares throughout the DRP election period from June 11-26, 2018 has been lower than the price of the new Maybank shares to be issued pursuant to the 16th DRP at RM10 each, the Board is of the view that a full cash dividend would offer shareholders better value at this point of time,” he explained.
“The Board remains assured that this decision is also in line with our mission of humanising financial services which calls us to do the right thing at all times, including being equitable to all shareholders.”
Farid said that the cancellation of the 16th DRP will not have any material impact on the performance of the Group or its capital structure and/or requirements, nor its issued share capital, earnings per share, net assets per share, gearing and substantial shareholders’ shareholdings of the Company.
“Maybank remains among the region’s best- capitalised banks with its Common Equity Tier 1 (CET1) ratio at 13.37 per cent and a total capital ratio of 18.12 per cent (after final cash dividend) as at endMarch 2018, which is more than sufficient to support its growth and regulatory requirements,” he said.
He also said that while the DR P has been cancelled on this occasion, it will remain an integral part of the Group’s strategy for sound capital management and would continue in the future where relevant, given that it offers sufficient flexibility to shareholders as well as the Group.
“We are firmly committed to ensuring a market- competitive dividend for our shareholders complemented by the 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 added.
Shareholders who had opted for the DRP and paid the RM10 stamp duty will be reimbursed the RM10 fee by Maybank.