OCBC's fourth quarter results are broadly in line with the lower earnings reported by DBS Group last Friday.
Its core earnings for October to December fell a staggering 41 per cent to $250 million even though it managed to grow the income it got from its core banking business by 28 per cent to $783 million.
This is due mainly to a sharp 44 per cent drop in non-interest income to $259 million and a big jump in provisions for bad loans to $243 million from a mere $13 million in the same period last year.
Rather than do a rights issue, it plans to reactivate its scrip dividend scheme and give shareholders the option to receive the final payout of 14 cents a share in the form of shares. It is sweetening the move by setting the issue price for the new shares at a 10 per cent discount to the average closing price of OCBC between the ex-dividend date and the book closure date.
If all investors take up the dividend in the form of scrips, the bank can retain $437 million in capital - a tidy sum not to be sniffed at. Given the current depressed level of its share price - it now trades at a six-year low - some investors may well take up the offer.
No comments:
Post a Comment