Dividend

In 2017, the PFSA issued the recommendation that a dividend could be paid only by banks meeting the criteria below:

• the bank is not subject to a restructuring programme;
• the bank performed well in the Supervisory Review and Evaluation Process – final BION score not worse than 2.5 (master scale – score 1 or 2);
• with financial leverage (LR) level higher than 5%;
• with Tier 1 ratio is 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% + addon + the combined buffer requirement + 1.5%.

It is recommended that banks which meet all the above criteria can pay out up to 50% of the generated profit in 2017.

Moreover, it is recommended to pay out dividend up to:

• 75% of the profit generated in 2017 by banks meeting all of the above criteria, as well as the requirement for a buffer at the target level, i.e. 2.5% of the total risk exposure,
• 100% of the profit generated in 2017 by banks meeting all of the above criteria (including Conservation Capital Buffer at the require d level), taking into account, within capital criteria, the bank’s sensitivity to an unfavorable macroeconomic scenario (ST – an individual add-on measuring bank’s sensitivity for unfavorable macroeconomic scenario defined as: the difference between TCR in the reference scenario and TCR in the shock scenario including supervisory adjustments (in stress tests conducted by the PFSA).

For banks with exposure to FX housing loans for households the dividend rate should be adjusted based on following criteria:

Criterion 1

based on the share of FX housing loans for households in the whole portfolio of receivables from the non-financial sector:

• banks with the share exceeding 10% – dividend rate adjustment by 20 p.p.;
• banks with the share exceeding 20% –dividend rate adjustment by 30 p.p.;
• banks with the share exceeding 30% – dividend rate adjustment by 50 p.p.;

Criterion 2

based on the share of FX housing loans granted in 2007 and 2008 in the portfolio of FX housing loans for households:

• banks with the share exceeding 20% – dividend rate adjustment by 30 p.p.;
• banks with the share exceeding 50% – dividend rate adjustment by 50 p.p

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.