Bank Pekao SA, Poland’s second-largest lender and a unit of UniCredit SpA, proposed to pay the highest dividend in five years after its fourth-quarter profit exceeded analysts’ estimates.
Management recommended a payout of 8.39 zloty a share, planning to spend 75 percent of last year’s profit, the bank said in regulatory statement today. That compares with 5.38 zloty paid last year and a 7.12 zloty forecast by Bloomberg. The dividend is set to be the highest since 2008 when the Warsaw-based lender paid 9.6 zloty a share, according to data compiled by Bloomberg.
“The payout is higher than expected,” Marcin Materna, an analyst at Bank Millennium SA in Warsaw, said by phone today. “Assuming that lending growth will stagnate this year, banks don’t need this surplus capital.”
Banks in Poland boosted their combined profit 4.5 percent to a record 16.2 billion zloty ($5.1 billion) last year as lending continued to grow even as the country’s economy slowed, according to data from the country’s financial regulator. Commerzbank AG’s BRE Bank SA last month proposed its first dividend in a decade while Citigroup Inc.’s Bank Handlowy SA announced a plan in March to more than double its payout.
Pekao shares rose for a third day, adding 1.5 percent to 163.4 zloty at 2:10 p.m. in Warsaw, trimming this year’s decline to 2.5 percent.
Fourth-quarter net income was 742.6 million zloty, beating the mean 714.8 million-zloty estimate of 14 analysts surveyed by Bloomberg. Full-year profit was little changed at 2.96 billion zloty, Pekao said in a separate statement today.
The bank’s profit this year may decline “by a few percent” as the country’s worst economic slowdown in more than a decade cuts demand for loans and boosts bad-loan provisions, Chief Executive Officer Luigi Lovaglio told reporters today.
The industry’s combined pretax profit may drop 13 percent in 2013 as retail loan growth is set to slow to 3.1 percent while corporate lending in Poland will probably shrink 0.9 percent, according to Pekao estimates released to the media.
Pekao may play a “significant” role in the consolidation of the banking market in Poland even as becoming the largest lender by assets is not its main goal, according to Lovaglio.
State-controlled PKO Bank Polski SA is Poland’s biggest bank, while Bank Zachodni WBK SA, which Banco Santander SA took over in 2011 and merged with Kredyt Bank SA this year, is the third-largest by assets.