IMB buybacks may be irregular

Wollongong mutual IMB will stick to its plan to buy back and cancel all its ordinary shares.

Michael Cole, chair of the board of IMB, wrote in the mutual's annual report that "as I foreshadowed at the last AGM, following the strong shareholder participation in the first buyback [in 2012], it remains the Board's intention to continue to seek to buy back all ordinary shares on issue through a series of buybacks."

Coles said this was "subject to the minimum capital requirements" and added a "caveat that initiating the buyback action at any time is always subject to a number of factors including the requirement of a more efficient cost of capital outcome for IMB."

He wrote that "shareholder members should not assume that share buybacks will take place annually or regardless of the share price. It remains subject to an enhanced cost of capital discipline."

Cole said IMB's dividend policy "would apply as the share buyback is implemented over an extended period."
 
He said the dividend payout ratio "will remain a result, rather than a targeted outcome, "of deliberations but was still subject to IMB's financial performance and prudential controls."

He said the payout ratio will always remain below 50 per cent, "on account of mutuality requirements."