IMB Bank is engaged in an off-market share buyback that aims to buy back $13 million of shares on issue.
The fifth off-market share buyback by IMB follows four previous buybacks that have seen just under 12 million shares bought back and cancelled.
Chief executive Robert Ryan said it 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 Australian Taxation Office.
Mr Ryan said the buyback also provided shareholders with larger holdings the opportunity to sell their shares faster than otherwise might be possible.
He said there were a number of reasons IMB Bank was seeking to buy back the ordinary shares on issue.
He said it simplified IMB’s structure and removes the confusion created by the share/mutual structure.
It resolves differences between the objectives of shareholder members and other members.
It improves IMB’s attractiveness as a potential merger partner.
And over time it removes the relatively high cash cost of servicing shares compared to other forms of capital available to IMB.
“IMB's board believes a mutual structure provides 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,” Mr Ryan said.
Shareholders wishing to participate in the buyback have until 5pm on December 11 to lodge their tender form.