IMB Capital Structure Review

The capital structure review undertaken by Grant Samuel and Watson Mangioni has been completed.  Their Report has been presented to the IMB Board.  The Report is available to members online by clicking here.

The recommendation of the Report is that to achieve IMB’s aims of longer term growth and viability in an increasingly competitive and more highly regulated industry, IMB’s mutual structure be supported by seeking to cancel the ordinary shares through buybacks of the ordinary shares on issue.  To ensure the buybacks are consistent with IMB meeting its capital adequacy requirements, it is expected that IMB will undertake a series of annual buybacks over the medium to long term.  Participation in any buyback will be at the option of each shareholder.

This recommendation has been unanimously adopted by the IMB Board subject to certain conditions.  IMB will only undertake this series of buybacks if its capital adequacy ratio is above a minimum level and it receives the necessary regulatory approvals, exemptions and rulings.  Details in relation to timing, amount and pricing of the first in this series of buybacks will be announced once IMB is satisfied these conditions have been met.

Having regard to the intention to support IMB’s mutual structure, IMB’s Board has formalised a dividend guideline which provides that while IMB’s capital adequacy ratio is and will remain above 14% and profits are maintained or increased, the IMB Board currently intends to pay a full year dividend of 25 cents per share.  The guideline is non-binding and indicative only but will assist the IMB Board in determining any interim and final dividend to be declared and paid going forward.

The buybacks will have no direct impact on depositor and borrower members.  All members are expected to benefit from the buybacks over the longer term as IMB becomes better positioned to compete, grow and be an active participant in the consolidation among mutual financial institutions that is expected to occur in the coming years.