National Australia Bank has decided to buy-back up to $2.5 billion on-market starting mid-to-late this month, and it will also purchase shares on-market alongside its dividend reinvestment plan.
NAB’s common equity tier one target is 10.75 to 11.25 per cent, which it currently exceeds. At the end of March, NAB had a CET1 capital ratio of 12.37 per cent and 12.4 per cent on a level two and level one measure respectively.
APRA’s “unquestionably strong” benchmark is 10.5 per cent.
The level two measure will fall 60 basis points as a result of the buyback to 12.15 per cent, it is projected, based on a March 31 pro-forma 12.15 per cent adjusted for the sale of MLC Wealth.
NAB boss Ross McEwan said: “Our target CET1 range reflects a balance between retaining a strong balance sheet through the cycle, supporting growth and recognising the importance of capital discipline to improve shareholder returns.”