Dividend
As part of strategy implementation, Bank Pekao S.A. (“Bank”) aims at effective capital management and maximization of return on equity for shareholders (ROE). Simultaneously, the Bank aims at maintaining capital surplus above minimum level required by law while taking into account execution of growth objective of the Bank and the capital group of the Bank.
Level of dividend payout is strictly dependent on the current and planned level of capital adequacy. In particular, Bank aims to maintain the Tier 1 ratio above 14.0% and Total Capital ratio (“TCR”) above 17%, according “Strategic Directions of Bank Pekao SA 2021-2024”. When determining the target capital level, Bank takes also into consideration capital assessment of the Bank by ratings agencies.
Guidelines of the Polish Financial Supervision Authority regarding the dividend policy
On March 14, 2018 the Polish Financial Supervision Authority („KNF”), published statement regarding principles of dividend policy for commercial banks in the medium-term perspective which was updated by the KNF Statement regarding the position of the supervisory authority on the assumptions of the dividend policy of commercial banks, cooperative and associating banks as well as insurance and reinsurance companies in 2020 of December 3, 2019.
KNF recommends that dividend payout of up to 50% of generated profit could only be paid by banks that:
- do not carry out the recovery program,
- are positively evaluated as part of the Supervisory Review and Evaluation Process (BION) and achieve the final rate not lower than 2.5,
- maintain leverage ratio (LR) above 5%,
- maintain Common Equity Tier 1 (CET1) ratio not lower than the required minimum, i.e.: 4.5% + 56%*add-on + combined buffer requirement,
- maintain Tier 1 (T1) ratio not lower than the required minimum, i.e.: 6% + 75%*add-on + combined buffer requirement,
- maintain Total Capital Ratio (TCR) ratio not lower than the required minimum, i.e.: 8% + add-on + combined buffer requirement.
The KNF recommends that up to 75% of profit generated could be paid in dividends by those banks, that fulfil all above criteria, additional in the amount of 1,5 pp. buffer in the capital criteria (ST).
The KNF recommends that up to 100% of profit generated could be paid in dividends by those banks, that fulfil all above criteria, including macroprudential stress test buffer in the capital criteria (ST).
In addition, banks with a significant exposure to foreign currency mortgage loans (i.e. those with over 5% share of foreign currency mortgage loans of their total non-financial sector receivable portfolio) should adjust the dividend payment rate based on two additional criteria: :
Criterion 1: Share of foreign currency mortgage loans in the entire portfolio of non-financial sector receivables:
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Criterion 2: Share of foreign currency mortgage loans granted in years 2007-2008 as a part of the entire foreign currency mortgage loan portfolio:
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Bank is obligated to meet the above criteria both on an individual and consolidated level.
KNF highlighted that the information presented was prepared taking into account ceteris paribus clause and has remained valid unless significant changes occur in macro or regulatory environment in the Polish banking sector.
Minimum capital requirements for the Bank
Minimum regulatory capital levels as well as capital levels required to meet criteria of up to 50%, up to 75% and up to 100% of net profit payout are presented in the table below
CET1 |
T1 |
TCR |
|
Minimum capital level resulting from Resolution 575/2013 |
4.50% |
6.00% |
8.00% |
Combined buffer requirement: |
3.26% |
||
Capital conservation buffer |
2.50% |
||
Countercyclical capital buffer |
0.00%[1] |
||
G-SII / O-SII buffer |
0.75% |
||
Systemic Risk Buffer |
0.00% |
||
SREP buffer (Group only) |
0.01%[2] |
||
BANK PEKAO TOTAL – minimum requirement |
7.75% |
9.25% |
11.25% |
GRUPA PEKAO TOTAL – minimum requirement |
7.76% |
9.26% |
11.26% |
Expected buffer for payment up to 50% of the dividend - maintaining the current systemic risk buffer at 3% |
3.00% |
||
Total requirement for up to 50% net profit payout as dividend |
10.76% |
12.26% |
14.26% |
buffer resulting from Banking Law Act |
1.50% |
||
Total requirement for up to 75% net profit payout as dividend |
12.26% |
13.76% |
15.76% |
ST buffer |
2.26%[3] |
||
Total requirement for up to 100% net profit payout as dividend |
14.52% |
16.02% |
18.02% |
[1] countercyclical capital buffer calculated as of 31.12.2020 at the level 0.0028% for Bank and 0.0029% for the Group
[2] results from KNF recommendation regarding holding by the Group own funds to cover the additional capital requirement to secure the risk resulting from mortgage-secured foreign currency loans and credits to households, amounts to 0.008% for TCR, which should consist of at least 75% of Tier 1 (which corresponds to 0.006 pp) and at least 56% of the Common Equity Tier 1 (which corresponds to 0.004 pp)
[3] the last buffer received from the KNF in 2019 specifying the bank's sensitivity to an adverse scenario, calculated as the difference between TCR in the reference scenario and the shock scenario at the end of the forecast period tested in stress tests (2022), including supervisory adjustments
General guidelines regarding net profit distribution
The Bank and the capital group of the Bank aim at maintaining own funds at a level ensuring solvency under normal conditions and in an event of extraordinary high losses.
When determining future net profit payout levels, both in the long and short-term, the Bank considers:
- planned development targets (strategic targets) of the Bank as well as of the capital group of the Bank,
- macroeconomic and financial markets conditions in Poland and globally,
- current capital adequacy ratios of the Bank at the individual and consolidated level (both under Pillar 1 and also Pillar 2),
- combined buffer requirement at the individual and consolidated level,
- planned or possible changes to legislation that have or could have an impact on capital adequacy,
- the stance of the KNF with regards to principles of dividend policy,
- investor expectations.
Guidelines regarding distribution of the net profit
In the first place, the Bank's Management Board, when recommending payments from profits, will take into account the recommendations regarding profit distribution of the supervisory authorities, in particular the KNF and the EBA.
On 29th March 2021, Bank's Management Board adopted a resolution specifying the following guidelines regarding distribution of the Bank's net profit for the years 2021-2024:
- allocation of 50% -75% of the Bank's profit for 2021 to the dividend for 2021,
- allocation of 50% -75% of the Bank's profit for 2022 to the dividend for 2022,
- allocation of 50% -75% of the Bank's profit for 2023 to the dividend for 2023,
- allocation of 50% -75% of the Bank's profit for 2024 to the dividend for 2024.
Guidelines regarding the distribution of the Bank's profit for the years 2021-2024 received positive opinion from the Bank’s Supervisory Board.
Guidelines regarding the distribution of the Bank's profit for the years 2021-2024 may change, and the Management Board may recommend the distribution of net profit for a given year during this period that is different than the payout indicated above, in particular depending on:
- recommendations of the KNF regarding the distribution of net profit or stance of the KNF regarding the distribution of net profit,
- restrictions resulting from legal regulations, in particular the Act on macroprudential supervision over the financial system and crisis management in the financial system, the Act on the Bank Guarantee Fund, the deposit guarantee system and resolution, the Banking Law Act
- significant change in risk-weighted asset growth,
- significant deterioration of the macroeconomic and financial markets conditions in Poland or globally,
- introduction of legislation that have or could have a significant impact on the capital adequacy of the Bank or the capital group of the Bank,
- imposition of additional capital buffers on the Bank.
Dividend history
On May 22nd, 2020 the Ordinary General Meeting of the Bank made the resolution regarding the distribution of net profit of Bank for 2019, following the resolution GM made a decision on no dividend payment for year 2019.
Dividend for: | No of shares | Dividend per share (PLN) |
Total dividend (PLN mil) |
EPS (PLN) | Divident yeld (%)* |
2019 | no dividend | ||||
2018 | 262.470.034 | 6,6 | 1732 | 8,7 | 7,1 |
2017 | 262.470.034 | 7,90 | 2.074 | 9,43 | 6,7 |
2016 | 262.470.034 | 8,68 | 2.278 | 8,68 | 6,9 |
2015 | 262.470.034 | 8,70 | 2.283 | 8,73 | 7,0 |
2014 | 262.470.034 | 10,00 | 2.625 | 10,34 | 5,6 |
2013 | 262.470.034 | 9,96 | 2.614 | 10,61 | 4,7 |
2012 | 262.470.034 | 8,39 | 2.202 | 11,26 | 4,7 |
2011 | 262.383.129 | 5,38 | 1.412 | 11,05 | 3,2 |
2010 | 262.367.367 | 6,80 | 1.785 | 9,63 | 4,8 |
2009 | 262.359.543 | 2,90 | 761 | 9,20 | 1,6 |
2008 | no dividend | ||||
2007 | 261.866.657 | 9,60 | 2.517 | 12,27 | 7,6 |
2006 | 166.808.257 | 9,00 | 1.504 | 10,72 | 2,5 |
2005 | 166.481.687 | 7,40 | 1.234 | 9,24 | 3,3 |
2004 | 166.481.687 | 6,40 | 1.065 | 8,08 | 3,7 |
2003 | 166.121.847 | 4,50 | 748 | 5,55 | 3,3 |
2002 | 165.748.203 | 4,18 | 693 | 4,64 | 3,9 |
2001 | 165.748.203 | 3,80 | 630 | 7,61 | 4,0 |
* Based on WSE Statistic Bulletin