BEIJING, Feb.1 -- National Australia Bank Ltd more than doubled a share buyback program to 1.2 billion Australian dollars (926 million U.S. dollars) after cutting its regulatory capital targets last year.

    The bank will increase the buyback by 700 million dollars, adding to the 500 million dollars previously indicated, and extend the period to September 30, the Melbourne-based bank said in a statement yesterday, Bloomberg News reported.

    National Australia may make "a third buyback announcement, most likely at the full-year result in November," Andrew Hokin, a Macquarie Bank Ltd analyst, said in a note to clients. Hokin estimates the bank will have about 2.3 billion dollars in surplus capital after the share purchase plan. He has a "neutral" rating on the stock.

    The bank cut its regulatory capital targets in July, freeing as much as 1.5 billion dollars to buy back shares or boost dividends. National Australia cut its minimum Tier 1 capital target to 6.25 percent and its adjusted common equity target, a regulatory capital measure, to as low as 4.25 percent.

    Further capital management activities would be considered "when appropriate," Chairman Michael Chaney said yesterday in Adelaide at the bank's annual shareholder meeting.

    National Australia was ordered by the nation's banking regulator in March 2004 to boost capital levels after unauthorized currency trading cost it 360 million dollars.

    Capital restrictions imposed by the nation's financial regulator following the currency trading scandal were lifted last month. The Australian Prudential Regulation Authority removed a requirement for the bank to maintain its capital adequacy, or ratio of capital to assets, at 10 percent.

    The stock has risen almost 20 percent in the past year, outpacing a 14 percent gain in the eight-member S&P/ASX 200 Banks Index.

    Chaney also forecast that dividend growth "should be" more aligned with profit.

  (Source: Shanghai Daily)