Insurance Australia Group Limited (IAG) has announced a quarterly dividend of AUD 1.5565 per security on its Capital Notes 3, payable mid-March 2026 with partial franking.
- AUD 1.5565 dividend per Capital Note 3 security
- Dividend partly franked at 25%
- Effective annual distribution rate of 6.2431%
- Ex-date 3 March 2026, payment date 16 March 2026
- No approvals or securities plans required
IAG’s Latest Dividend Announcement
Insurance Australia Group Limited (ASX, IAG) has confirmed a new ordinary dividend distribution of AUD 1.5565 per security for its Capital Notes 3 (IAGPF). This payment is scheduled for 16 March 2026, with the ex-dividend date set for 3 March and the record date on 4 March. The dividend relates to the quarter ending 15 March 2026.
Dividend Details and Franking
The dividend is partly franked at 25%, reflecting a franked amount of AUD 0.3891 per security and an unfranked portion of AUD 1.1674. This partial franking is consistent with IAG’s approach to balancing shareholder returns with tax efficiency. The effective annual distribution rate for these Capital Notes stands at 6.2431%, combining a base rate linked to the 3-month Bank Bill Swap Rate (BBSW) of 3.712% plus a fixed margin of 3.20%.
Capital Notes 3 Context
These Capital Notes 3 are perpetual, non-cumulative, and redeemable securities issued by IAG, designed to provide investors with a steady income stream linked to prevailing short-term interest rates plus a margin. The margin was fixed at issuance and remains unchanged, providing certainty on the yield component above the reference rate. The dividend payment does not require any additional approvals or court orders, underscoring the routine nature of this distribution.
Market and Investor Implications
For income-focused investors, this announcement confirms a reliable quarterly income with a competitive yield in the current market environment. The partial franking credits add value for Australian investors seeking tax-effective returns. Market participants will watch closely how this dividend aligns with IAG’s broader capital management strategy and whether future distributions maintain or adjust the current yield amid evolving interest rates.
Bottom Line?
IAG’s steady dividend on Capital Notes 3 signals ongoing income reliability but invites scrutiny on future yield sustainability.
Questions in the middle?
- Will IAG maintain the 3.20% margin on Capital Notes 3 in future distributions?
- How might changes in the 3-month BBSW affect upcoming dividend rates?
- Could IAG increase franking levels to enhance tax efficiency for investors?