Shares and dividends

The individual recommendation from the Polish Financial Supervision Authority regarding the dividend payment for 2023

On 21 February 2024 the Bank received the recommendation from the Polish Financial Supervision Authority („PFSA”) in which the PFSA confirmed that the Bank fulfils the criteria for the payment of dividend up to 75% of the profit for 2023, whereby the maximum amount of payment may not exceed the amount of the annual profit less the profit generated in 2023 already counted as own funds.

The Bank has included in its own funds the net profit, achieved in the first half of 2023, in the amount of PLN 1,624,430,283 at standalone level and PLN 1,697,253,857 at consolidated level.

PFSA also recommends that the Bank should limit the risk occurring in its activity by not conducting any other activities, in particular those beyond the scope of current business and operating activities, which may result in a reduction of own funds, including possible dividend payments from undistributed profits from previous years and buybacks or buyouts of own shares, without prior consultation with the supervisory authority.

PFSA presented the position that the amount of the interim dividend, paid out from the portion of the profit earned in 2022 allocated to the reserve capital created for dividend payment (including interim dividends) may not reduce the amount indicated in the PFSA's position.

As a result, the Bank fulfils the criteria for the payment of dividend up to 75% of the profit for 2023, without decreasing this amount by the amount of the paid, interim dividend (PLN 1,600,000,000) whereby the maximum amount of payment may not exceed the amount of the annual profit less the profit generated in 2023 already counted as own funds (in the amount of PLN 1,624,430,283 at standalone level and PLN 1,697,253,857 at consolidated level).

Dividend policy of PKO Bank Polski S.A.

The Dividend policy takes into account the Bank’s intention to provide stable dividend payments in the long term, in accordance with the principle of prudent management of the Bank and the Bank's Group.

The objective of the Dividend policy is to optimize the capital structure of the Bank and the Bank's Group, while considering the return on equity, the cost of capital and the capital needs for development, and maintaining an appropriate level of the capital adequacy ratios and meeting the minimum requirement for own funds and eligible liabilities (MREL).

In line with the adopted Dividend policy, an additional tool for capital redistribution is the purchase of own shares aimed at their redemption. The Dividend policy indicates that the General Meeting shall consent to the acquisition of own shares by the Bank, after prior approval of the Supervisory Board, specifying the terms of the acquisition, including the maximum number of shares to be acquired, the period of authorization to acquire shares, which may not exceed five years and the maximum and minimum amount of consideration for the acquired shares, if the acquisition takes place for consideration. Purchase of own shares for redemption in each case requires the Bank to obtain the prior consent of the Polish Financial Supervision Authority. The acquisition of own shares may also be made in a situation in which the book value of shares is lower than their current market price.

The conditions for the Bank's ability to pay dividends have been adjusted according to the PFSA’s requirements in the Recommendation Z. These requirements also apply to the purchase of own shares by the Bank.