OneWest Bank intends to pay USD 1 billion dividend to investors ahead of IPO- sources
Sources told Bloomberg that OneWest Bank is planning a USD 1 billion dividend to its investors before it goes public next year. Regulators will still need to approve the payout to backers which include George Soros and John Paulson. J. Christopher Flowers and Michael Dell are also investors in OneWest.
The dividend would give back most of the money to the group who invested in the lender formerly called IndyMac Bancorp Inc when it was purchased from the Federal Deposit Insurance Corp four years ago. The people with knowledge of the matter added that the dividend would reduce the bank's surplus capital and thereby improve its return on equity. They spoke on the condition of anonymity since the plans were confidential.
The FDIC took over IndyMac Bancorp, a subprime mortgage lender, in July 2008. OneWest Chief Executive Officer Steve Mnuchin was able to gather USD 1.55 billion to purchase IndyMac from the regulator. In January, a letter sent by Paulson to investors in his company Paulson & Co revealed that OneWest had already given back at least USD 500 million to investors. The payout was given in the fourth quarter.
In February, people also said that OneWest held informal discussions with companies who might be interested to buy the lender. This included UnionBanCal Corp and US Bancorp. OneWest is now readying itself for an initial public offering, according to the two sources.
The FDIC said OneWest posted a net income of USD 183 million for the first half of this year. This represented a 14% jump from its income the year before. As of June, the lender which focuses on providing home loans had equity of USD 4.2 billion. The lender's return on equity was 8.9% in the first six months of this year, based on data from the FDIC. The data revealed that an average bank with assets of at least USD 10 billion had a return on equity of 10.4%.