PT Bank OCBC NISP Tbk (NISP) plans to buy back its shares with a maximum value of Rp500 million, including securities brokerage commission and other related costs.

Stock buyback implementation to provide variable remuneration for management and employees.

Director of Bank OCBC NISP, Hartati, said that the parties to the transactions were the company and the public shareholders. The relationship between the transacting parties is a third party.

"The estimated cost required to buy back shares is a maximum of Rp500 million, including a commission for securities brokerage and other related costs," she said in an information disclosure submitted to the Indonesia Stock Exchange (IDX) on Monday (22/2).

This transaction's purpose is to provide variable remuneration for 2020 performance to the company's management and employees to comply with the Financial Services Authority Regulation (POJK) Number 45 / POJK.03 / 2015 concerning the implementation of governance in providing remuneration for commercial banks.

The implementation of share repurchase to provide variable remuneration to management and employees is also under POJK No. 30 / POJK.04 / 2017 concerning share buyback issued by public companies and will be carried out under and subject to applicable laws and regulations.

"The company believes that the implementation of the company's share buyback transaction will not have a material negative impact on the company's business activities, considering that the company has sufficient working capital and cash flow to finance transactions in conjunction with the company's business activities," Hartati said.

Furthermore, the company will hold an Annual General Meeting of Shareholders (AGMS) on April 6, 2021. One of the agendas is the company's plan to buy back the shares that have been issued by the company and listed on the Stock Exchange.

The lender will carry out the share buyback within a maximum period of 18 months after the AGMS approves its shares' buyback. The company's shares to be repurchased are a maximum of 0.002 percent of the total shares issued and fully paid or a maximum of 436,000 shares.

As of December 2020, OCBC NISP only managed to pocket a net profit of Rp2.1 trillion or a 27.5 percent decrease from 2019's profit of Rp2.9 trillion. The decline in profit was in line with the increase in provision fees to anticipate corporate credit risk. Excluding the allowance for impairment losses, OCBC NISP's operating profit still has 14 percent growth on a year to  Rp5.2 trillion.