Citigroup's Handlowy Gains as Quarterly Profit Beats Estimates

  • Polish lender will keep its dividend policy, CEO Sikora says
  • Stock climbs to highest since Nov., outperforming local peers

Bank Handlowy SA surged to the highest in three months as the Polish unit of Citigroup Inc. said it will pursue its dividend policy and fourth-quarter profit topped analysts’ estimates.

The shares jumped 3.8 percent to 80.81 zloty, the highest since Nov. 6, as of 10:38 a.m. in Warsaw. Profit at the Warsaw-based bank dropped 42 percent to 118.3 million zloty ($30 million) from a year earlier, it said in a regulatory statement on Wednesday. That exceeded the 108.3 million-zloty mean estimate of six analysts surveyed by Bloomberg.

“The beat at the bottom line is positive news at the bank that should offer a 100 percent dividend payout,” Marcin Gatarz, an analyst at Pekao Investment Banking SA in Warsaw, said in a note. He recommends buying the stock.

Chief Executive Officer Slawomir Sikora, serving since 2003, said in a statement the bank will “consistently pursue” its dividend policy after returning 99.9 percent of 2013 and 2014 profits to investors.

Polish banks have been hit by tougher capital rules and a new tax, while record-low interest rates have limited room for boosting margins. At the same time prospects of Handlowy, which focuses on servicing corporate clients, are not shadowed by the looming bill forcing banks to convert foreign-currency loans into zloty as, unlike most of its local peers, it has no such mortgages.

That helped its shares advance 13 percent so far this year, making it the best performer in Warsaw’s WIG-Banking Index, which has lost 3.4 percent in the period.

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