BANKING group AMMB Holdings Bhd (1015) plans to give its shareholders a choice of receiving dividends in cash or new shares, in a move to improve its capital position.
Under the dividend reinvestment plan, those keen to be paid in shares must notify the group in writing. This means that shareholders who don't do so will continue to get paid in cash.
However, AMMB will still need the approval of its shareholders at a meeting. Bank Negara Malaysia has no objections to the proposal.
"The reinvestment of the cash dividend entitlements by shareholders for new shares will enlarge AMMB's share capital base and strengthen its capital position," the lender told Bursa Malaysia yesterday.
This means that the group will have more cash to fund working capital or capital funds requirements of AMMB's banking subsidiaries.
It is also consistent with proposals by an international committee on how to improve the capital level of banks, AMMB said.
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