PZU Jumps as Polish Insurer Discusses Extra Payout: Warsaw Mover

PZU SA, Poland’s largest insurer, posted the biggest advance in two weeks, as its supervisory board discusses options to return excess capital to shareholders.

The stock climbed as much as 2.2 percent and closed 1.5 percent higher to 446.5 zloty in Warsaw. The shares have gained 2.2 percent this year, while the benchmark WIG20 Index has lost 6.4 percent.

The state-controlled company may pay out dividend from its excess capital of about 5 billion zloty ($1.58 billion), according to two people familiar with the proposals who asked not to be identified. Proposals for the board include dividend and a share buyback plan, one of the people said.

“In our view the dividend for 2013 will amount to about 5 billion zloty,” Jaromir Szortyka, a Warsaw-based analyst at PKO Bank Polski SA, said in a note today. “The key question is whether PZU’s management will decide to pay an interim dividend this year or make the entire payout to shareholders in 2014.”

An interim dividend is “most probable” and may reach from 20 zloty to 30 zloty a share, Pawel Kozub, an analyst at UniCredit SpA in Warsaw, said in a note today. “In our view PZU will present the capital management plan together with its second-quarter results” tomorrow.

Poland last week increased its target for 2013 dividends from companies supervised by the Treasury Ministry to about 6.5 billion zloty from 5 billion zloty as the government seeks cash to plug a growing budget deficit. The ministry has gained abound 5.5 billion zloty in dividends so far this year, it said in an e-mail to Bloomberg news on Aug. 21.

Before it's here, it's on the Bloomberg Terminal.