Mr. Piti Tantakasem, CEO of TMBThanachart, revealed that "The Bank of Thailand (BoT) has relaxed dividend payment policy for financial institutions. Previously, dividend paid from net profit (bank-only basis) was limited, not exceeding the past payout rate. Now it was lifted as the BoT deemed that commercial bank system has strong level of provision and capital to withstand uncertainties ahead. The Bank therefore will propose for shareholders' approval to increase dividend payout ratio from 34% in the previous year to 47% of 2021 net profit on bank-only basis which is equivalent to a payout ratio of 35% of net profit on consolidated basis. In total, dividend payment would be 3,672 million baht or a dividend per share of 0.038 baht.
In addition, the Bank will seek approval for the issuance of 3-year warrants to be allocated to existing shareholders at no cost. The number of issuing is up to 966,228,745 units or up to 1% of the paid-up shares of the Bank. The allocation ratio is 100 existing ordinary shares for 1 unit of warrant and the exercise ratio is 1 unit of warrant for a right to purchase 1 ordinary share at the exercise price of 0.95 baht.
Regarding the issuance of warrants, we believe it will help increase shareholders' returns and it is beneficial to both shareholders and the Bank. The exercise price is also appropriated and in the interest of shareholders' value, especially in the aspect of creating investment choices and flexibility when making investment decision. For those who focus on long-term value and would like to maintain their shareholding proportions, they can exercise their warrants to purchase ordinary shares at the exercise price. Investment timeline is also flexible, shareholders can make decision to exercise their rights every quarter during 3 years of warrant term. Besides, for shareholders who would like to increase liquidity, warrant is a financial instrument that can be traded in the secondary market.
For the Bank, capital raising is not a key objective of this issuance as we currently have a solid level of capital position, indicating by CAR ratio which is at 19.3% compared to BOT's minimum requirement of 11.0%. The issuance is indeed as part of our long-term funding plan as we have always explored various types of financial instruments to have more funding options to be used and adaptable to economic cycle and to optimize funding efficiency for future projects.
As a result of such a funding plan, we have been innovative and the first bank in using new financial instruments during the past few years. On top of the latest initiative of issuing warrants, we were the first to issue TSR (Transferable Subscription Rights), providing options to shareholders either to exercise or transfer their rights. We were the first to issue debt instrument, AT1, to strengthen capitals at lower funding costs compared to traditional capital raising tools. We also issued bonds to finance climate-smart projects exclusively, being the first Thai bank to issue green bond in the country.
For more information of the issuance, the exercise of warrants and contact details of appointed broker, the Bank will disclose to public after the AGM approval in April on the SET website and Bank's website. Meanwhile, investors can contact our call center 1428."
Source: TMBThanachart Bank
