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IMB Bank undertakes another off-market share buyback

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IMB Bank is currently part way through an off-market share buyback under which it aims to buy back $13 million of shares on issue. This is the fifth off-market share buyback IMB has conducted. The previous four buybacks have seen just under 12 million shares bought back and cancelled.

IMB Bank’s Chief Executive Robert Ryan said: “The off-market buyback provides shareholders an opportunity to sell their shares with a different tax outcome than would be received by the normal course of selling shares on market. A large part of the buyback price is a dividend, with franking credits attached. The other portion of the buyback price is considered the capital consideration by the ATO.

“The buyback also provides shareholders with larger holdings the opportunity to sell their shares faster than otherwise might be possible on IMB’s market,” Mr Ryan said.

Mr Ryan said there were a number of reasons IMB Bank was seeking to buy back the ordinary shares on issue, including it:

  • simplifies IMB’s structure and removes the confusion created by the share/mutual structure;
  • resolves differences between the objectives of Shareholder Members and other Members;
  • improves IMB’s attractiveness as a potential merger partner with other mutual ADIs;
  • and removes, over time, the relatively high cash cost of servicing Shares compared to other forms of capital available to IMB;

“IMB's board believes a mutual structure provided the best opportunity to deliver IMB's strategic goals. The intention is to buy back all of the ordinary shares on issue over the medium term,” he said.

Shareholders wishing to participate in the buyback have until 5.00pm on Monday 11 December 2017 to lodge their tender form.

IMB Bank encourages shareholders seek legal, financial, taxation or other professional advice before deciding whether to participate in the buyback.