Dividend

In March 2019 PFSA issued its standpoint concerning dividend policy of commercial banks in mid-term horizon. Its assumptions were maintained in the PFSA’s standpoint from January 2019 referring to dividend policy in 2019. This guidance remains consistent with the PFSA’s recommendation regarding dividend payout for 2018. According to the mentioned recommendations, a dividend could be paid only by banks meeting the criteria below (both on stand-alone and consolidated level):

• the bank is not subject to a restructuring programme;
• the bank performed well in the Supervisory Review and Evaluation Process – final SREP score not worse than 2.5 (master scale – score 1 or 2);
• with financial leverage (LR) level higher than 5%;
• with Tier 1 capital ratio not lower than the minimum value set for this ratio increased by 1.5%: 6% + 75%*add-on + the combined buffer requirement + 1.5%;
• with Total Capital Ratio not lower than the minimum set for this value increased by 1.5%: 8% + add-on + the combined buffer requirement + 1.5%.

It is recommended that banks which meet all the above criteria can pay out up to 75% of the profit generated in a year preceding the decision.

Moreover, it is recommended to pay out dividend up to 100% of the profit generated in a year preceding the decision by banks meeting all of the above criteria, taking into account, within capital criteria, the bank’s sensitivity to an unfavourable macroeconomic scenario (measured by stress tests For banks with exposure to FX housing loans for households (which have more than 5% of FX mortgage loans for households in their portfolio of receivables from non-financial sector) the dividend rate should be adjusted based on following criteria:

Whenever a bank with undistributed profit from previous years intends to pay out dividend, it is obliged to report this plan to the Polish Financial Supervision Authority which will assess it on an individual basis. Only banks which meet the criteria for paying out dividends may apply for such consent.