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National Australia Bank (NAB) intends to buy back up to $2.5 billion of its ordinary shares on-market.
In a submission to the Australian Securities Exchange (ASX) on Friday, NAB said that it expects to commence the buy-back in mid- to late-August 2021.
In addition to the on-market buy-back, NAB said that it also intends to purchase shares on-market to satisfy Dividend Reinvestment Plan requirements over the buy-back period.
“The finalisation of APRA’s regulatory capital framework over the course of 2021 and 2022 will provide NAB with improved clarity to consider further capital management initiatives, alongside an assessment of the continued medium-term economic impacts of COVID-19,” the company said in its statement. “The exact nature, amount, and timing of any further capital returns beyond the $2.5 billion on-market buy-back announced today, will be dependent on market conditions and capital outlook.”
“Through the pandemic, NAB has continued to build its financial strength while providing significant support to our customers and colleagues,” said Ross McEwan, group chief executive officer of NAB. “Our support for customers and colleagues continues through ongoing lockdowns and as the COVID-19 situation evolves. At the same time, NAB’s strong financial performance, combined with the divestment of MLC Wealth, has created an opportunity for NAB to reduce our surplus capital while retaining a strong balance sheet during these uncertain times.”
McEwan added that the bank considers the on-market buy-back to be the “most appropriate mechanism to achieve our previously stated bias towards reducing share count, which will help drive sustainable ROE [return on equity] benefits.”