A Polish Bank Regulator Has Established A Dividend Policy Through 2023

Poland's financial regulator KNF said on Tuesday that it has established a new dividend policy for banks for 2023, enabling them to pay out a proportion of their net profit to shareholders provided certain requirements are met.

Banks will require a leverage ratio of more than 5% and enough capital buffers to qualify for up to 50% of net profit in 2022.

Banks that have the ability to pay up to 75% must fulfill the capital requirements for a 50% payment, taking into consideration their vulnerability to unfavorable macroeconomic circumstances.

To pay out 100% of earnings in dividends, banks must fulfill all of the conditions established for lesser payments, plus their loan portfolio must be of excellent quality, with non-performing loans of no more than 5%.

According to the regulation, all requirements must be satisfied at both the consolidated and non-consolidated levels.

The permitted dividend payment will also be determined by the number of foreign currency mortgages.

About KNF

The Polish Financial Supervision Body (Komisja Nadzoru Finansowego, KNF) is Poland's financial regulatory authority, in charge of financial market supervision, including regulation of banking, capital markets, insurance, pension schemes, and electronic money institutions.

The KNF collaborates with the European Banking Authority (EBA), which is a “non-governmental organization that aims to promote effective and uniform prudential regulation and supervision throughout the European banking industry.” To that purpose, the EBA has published Recommendations on outsourcing to cloud service providers, which outline a comprehensive approach to the use of cloud computing by EU financial institutions.

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