Harrison White
Cambodia’s only publicly traded commercial bank Acleda Bank (CSX:ABC) has announced it will distribute 35% of last years $166.67 million after-tax profit to shareholders equating to KHR 548 a share.
The total annual dividend of $58 million is a 37% increase from the bank’s 2020 total annual dividend of $40 million or KHR 399 a share after receiving central bank approval due to the bank demonstrating a strong COVID-19 exit plan.
To read more about Acleda Banks’ 2020 annual dividend click here.
The annual dividend is 3.38% of the company’s Initial Public Offering of KHR 16,200 in 2020 and equal to 4.7% of the current share price of around KHR 11,440 a share. In comparison, Acleda Bank currently offers 12 months term deposits of Khmer riels at 6% per year.
Stephen Higgins from local investment and advisory firm Mekong Strategic Partners told Cambodia Investment Review that the bank’s dividend is appropriate for the returns they’re generating, and their need to retain capital to support their growth.
“The 2021 annual dividend is not too low, and it’s not too high. Not all companies here get their dividend policy right, for example, PPAP dividend is way too low compared to peers around the region and the earnings they’re generating,” Higgins said.
Future growth potential strong for Acleda Bank shares
Han Kyung Tae, Managing Director of brokerage house Yuanata Securities told Cambodia Investment Review that under his conservative assumptions ABC should increase both equity and dividend return over the coming years.
“If investors can exit at the current Price-to-book (PB) multiples of 1x PB in the future, this shows that if Acleda maintains its return on equity as at the current range over time, which is quite possibly, the investment returns on the current market price for the shareholders will prove to be highly substantial with equity growing between 12% and 15% return on equity plus close to 5% dividend yields,” he said.
“It is hard to find any other investment opportunities in Cambodia that can match the bank’s shares. The assets of the bank are probably the most well-diversified portfolio in Cambodia and the long-term perspective of the bank’s business goes along with the country’s economic prospects,” he added.
Acleda Financial Trust buys 1.789 million shares
In addition, the bank’s trustee Acleda Financial Trust (AFT) announced it had purchased 1.798 million shares worth approximately $5.2 million based on the current share price adding the trust would be purchasing more shares under its long-term strategy.
In February the company’s largest shareholder – ACLEDA Financial Trust (AFT) – said it has plans to purchase an undisclosed number of shares over the next five years in a statement released to the Cambodia Securities Exchange.
To read more about the AFT announcement to purchase Acleda Bank stock click here.
Morgan Stanly purchases $43M of Acleda Bank shares
One of the world’s largest investment firms Morgan Stanly has purchased $43.23 million of Acleda Bank shares through Cambodia Securities Exchange marking the largest ever Negotiated Trading Method (NTM) buy.
The deal was approved by shareholders during an Extraordinary General Meeting held last year when ABC shareholders approved the transfer of a 3.5 percent stake in the lender from Triodos to North Haven Thai Private Equity Rumdul Company (Hong Kong) Limited.
North Haven is managed by Morgan Stanley with North Haven’s Ong Ling Wei the authorized representative of the company.
To read more about Morgan Stanly buying Acleda Bank shares click here.
