The Tribune

Commonwealth Bank yesterday announced a three-for-one stock split to boost trading activity and make its shares more affordable to retail investors.

“I am pleased to announce this three-for-one stock split, which reflects the continued strong financial position of the bank,” said William B. Sands, its executive chairman. “This split is a direct reflection of years of increasing shareholder value and the ongoing liquidity of our shares.”

Mr Sands said Commonwealth Bank’s shareholders approved the split at its May 31 Annual General Meeting (AGM), with the Board of Directors now giving the go-ahead.

He added: “It has always been the goal of the bank to have the average customer participate in the ownership of the bank. The great success of the Bank since going public in 2000 has continually resulted in increases in the share price, and may have put the purchase of the bank’s shares out of reach for some customers. This stock split will make the bank’s shares more affordable for everyone.”

Shareholders of record as at September 29, 2017, will receive two additional shares for each share they hold at that date. The new shares will be issued on October 12, 2017, and Commonwealth Bank’s ordinary shares will begin trading on a split-adjusted basis on October 6.

This is the second stock split staged by Commonwealth Bank since its 2000 initial public offering (IPO). The previous stock split, which was also a three-for-one, occurred in 2007.

Commonwealth Bank’s share price closed yesterday at $10.48 on the Bahamas International Securities Exchange (BISX), down slightly from its 52-week high of $10.60.

Stock splits are nothing new to the Bahamian capital markets, and Commonwealth Bank is the second BISX-listed company within a month to go this route. FOCOL Holdings effected its own three-for-one split earlier this month, while Cable Bahamas also used the same ratio several years ago.

Share splits are typically done to make a stock in demand more affordable to investors, as well as broadening liquidity, boosting trading volumes and expanding the investor base.

Commonwealth Bank has $1.6 billion in total assets and some 6,000 shareholders. It operates 12 branches on four islands and employs 560 people.