What is boosting Insurance Australia’s (ASX:IAG) share price today?

October 17, 2022 12:08 PM AEDT | By Sonal Goyal

Image source: © Timonschneider | Megapixl.com

Details about IAG’s share buyback

Reportedly, the on-market share buy-back will be funded by Business Interruption (BI) provision. The general insurer informed the market that it had reduced its net BI provision to AU$615 million from AU$975 million after a decision came from High Court regarding test cases on 14 October 2022.

According to ASX announcement,

IAG mentioned that the actual number of shares bought, and the buy-back timing would depend on market conditions, share prices and other factors.

Capital impact of the share buyback

IAG said that on a pro-forma basis, 30 June 2022 common equity tier 1 (CET1) ratio is expected to be 0.99. It would be in the target range of 0.9 to 1.1 times the prescribed capital amount.

The CET1 estimation has taken into consideration the reduction in BI provision, a final dividend payment of the financial year 2022, AU$350 million buy-back and finalisation of the sale of the Malaysian business.

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