The sale of underperforming assets housed within the non-core ‘bad bank’ would release significant funds, possibly allowing the company to pay a special dividend to shareholders. Given that shareholders received a 15 cent per share special dividend in October 2012, a further return will be extra pleasing, particularly given the current yield excluding the special dividend is at the low end for the banking sector at 3.5%. The AFR report certainly got the market excited with the shares up 3.3% in early trade on Monday compared with the ‘Big Four’, including Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank (ASX: NAB) which were up just over 1%.
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