Santander’s Polish unit could pay 100% dividend, CEO says

By Mateusz Rabiega

GDANSK (Reuters) -The Polish arm of Spanish lender Santander could pay dividends reaching 100% of annual profits, supported by its results and capital position, but would need the regulator to raise its limits, CEO Michal Gajewski said on Tuesday.

In the past year, the bank paid out 4.56 billion zlotys ($1.13 billion) of dividends, consisting of 75% of yearly profit and funds from dividend capital, in line with the regulator’s current maximum for the bank.

Asked about possibility of dividend payments reaching 100% in this and future years, Gajewski said that Santander Bank Polska could pay such dividends, however it was restricted by the recommendations of the Polish Financial Supervisory Authority (KNF).

“When it comes to dividends, we are of course awaiting for KNF’s recommendation. We have a very strong capital position … our strategy is to pay them regularly and in the biggest scale possible, but it is dependent on the KNF decision,” Gajewski told reporters.

Troubled with legal aftermath of Swiss franc mortgages, Polish banks have found themselves unable to get approval from the regulator for full dividend payments.

Between 2019 and 2022, the KNF recommended top lenders to keep hefty chunks of their profits, and later advised them to temporarily hold off dividends altogether due to the uncertainties surrounding the COVID pandemic.

It has gradually eased the conditions for sector dividends, as the risks, including the impact of Swiss franc mortgages, have subsided.

The KNF is likely to make its recommendation in the coming months, with previous rulings coming in either the fourth quarter of the same year or the first quarter of the following year.

The stock was up 5.6% at 1112 GMT, outperforming Warsaw blue-chip index.

The lender posted a 27% jump in third-quarter net profit, supported by lower provisions for loans in Swiss francs, ending the period with 1.94 billion zlotys of profits, having beat expectations.

($1 = 4.0222 zlotys)

(Reporting by Mateusz Rabiega; Editing by Clarence Fernandez, Jan Harvey and Alison Williams)