KUALA LUMPUR, March 25 CIMB Group Holdings Bhd , Southeast Asia's fifth-largest lender by assets, said it had received approval from Malaysia's central bank for a dividend reinvestment scheme (DRS) aimed at strengthening its capital position.
The scheme will provide shareholders the option of reinvesting their cash dividends into new shares.
It will allow CIMB to conserve capital while maintaining its dividend payout of 40 to 60 percent of its earnings and as it looks to implement cost controls after having spent $3.7 billion on expansion. <ID:nL4N0B42SV>
"The proposed DRS provides an alternative for the company to balance the demand of its investors and its capital objective," CIMB said on Jan. 18 when it proposed the plan.
Bank Negara Malaysia approved the scheme in a letter dated March 25, the bank said on Monday.
Other banks such as Malayan Banking Bhd, RHB Capital Bhd and Affin Holdings Bhd have mandates to offer similar schemes. (Reporting by Al-Zaquan Amer Hamzah; Editing by Jane Baird)