National Australia Bank (ASX:NAB)
intends to buyback up to $2.5 billion of its ordinary shares on-market to manage its common equity tier 1 (CET1), towards its target range of 10.75–11.25 per cent. The CET1 ratio compares NAB's capital against assets, with the buyback expected to commence in August 2021.
NAB reported CET1 capital ratio of 12.37 per cent at Level 2 and 12.4 per cent at Level 1 as at 31 Mar 2021.The buyback is aimed to reduce the CET1 capital ratio at Level 2 by around 60 basis points.
NAB chief executive officer 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."
He continues, "we consider the on-market buy-back to be the most appropriate mechanism to achieve our previously stated bias towards reducing share count, which will help drive sustainable ROE benefits.”
Shares in NAB (ASX:NAB)
are trading 0.47 per cent higher at $25.89.