The supervision will allow banks to allocate 100 percent. profit for '24 for dividend?

Luc Williams

“We see room for banks to pay higher dividends once we are satisfied with bank capital levels,” he said. deputy chairman of the Polish Financial Supervision Authority, Marcin Mikołajczyk journalists behind the scenes Banking Forum.

This has happened before

“Historically, in particular years, there was a possibility dividend payments by banks up to 100 percent profits. We see room to return to such levels when it comes to banking leaders, i.e. banks that more than meet capital requirements and pursue an appropriate lending policy – especially since the situation in the banking sector in this respect has improved and capital accumulation allows both the development of lending and and to share the profit. I cannot rule out that this may apply to profits achieved in 2024,” he added.

In the dividend guidelines for commercial banks presented in December, the Polish Financial Supervision Authority stated that the maximum level of dividend that can be paid from the profit earned in 2023 is limited to 75%. “due to the expectation of strengthening the capital base in order to absorb any potential materialization risks accumulated in the Polish environment banking sector“.

The Commission also determined, among others: additional criteria for dividend payment for banks with foreign currency housing loans.

“We do not intend to give up additional requirements related to FX housing loan portfolios. We are also in favor of leaving the loan portfolio quality criterion at the NPL level not exceeding 5 percent for banks that are considering paying out more than 50 percent of the profit,” Mikołajczyk said.

Flexibility and individual approach

“At this stage, we do not see the need to introduce additional buffers in the dividend payment criteria,” he added.

In 2023, in the case of several banks, the supervisor also agreed to a payment dividends from retained earnings.

“When it comes to the payment of dividends from retained earnings, we are flexible. Banks interested in such a payment must contact us individually and will be assessed in terms of their capital situation. If it allows for an additional payment, we see no contraindications,” Mikołajczyk said.

“We still expect banks to apply for consent buy-back. Here we also have an individual approach, depending on the capital situation of banks,” he added.

Mikołajczyk said that the final guidelines regarding the dividend policy will be made as usual at the end of the year.

What was it like in 2023?

In December 2023, the Polish Financial Supervision Authority determined that the amount of up to 75 percent profit from 2023 can only be paid by banks that meet the criteria for the payment of 50% and whose portfolio of receivables from the non-financial sector is also characterized by good credit quality (the share of NPLs, including debt instruments, at a level not exceeding 5%).

The Polish Financial Supervision Authority announced that for banks with a significant portfolio of foreign currency housing loans, the dividend rate should be additionally adjusted to take into account additional criteria. (PAP Business)


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