Big banks to boost stocks with dividends

Major institutions will buy back shares to stave off falling prices: report.

Australia’s big banks will buy back more than $6.5 billion of their own stock, giving investors a windfall of dividend cheques, to support share prices as they fall from record highs, The Australian reports.

According to the newspaper, Goldman Sachs’ Richard Coppleson said ANZ Bank Ltd, Westpac Banking Corporation Ltd and National Australia Bank Ltd's plans to spend about $2 billion each on buybacks for dividend reinvestment would support share prices that were in decline since trading ex-dividend.

Mr Coppleson also said retail investors, who own between 41% and 53% of stock in the big four banks, were unlikely to be sellers given rising dividends and tax implications, the newspaper reports.

The big banks have outperformed the broader sharemarket by 13% in the last year, with NAB leading the charge with a more than 45 per cent rise.

ANZ Bank’s buybacks will end this week, while for the other majors the buybacks will end next month, The Australian reports.

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