Poland will not force dividend revenue target should PKO BP withhold payout

By bne IntelliNews April 21, 2015

The Polish government hopes to meet its target of PLN4.5bn (€1.13bn) in revenue from dividends in 2015, unless the risks overhanging the banking sector knock it off track, the treasury minister said on April 21.

Wlodzimierz Karpinski said Warsaw will not seek other avenues to make sure it meets the target should PKO BP be ordered by financial watchdog KNF not to pay a dividend. The regulator has said it will "recommend" lenders with high exposure to Swiss franc loans do not pay out on 2014 results. PKO, Poland's biggest bank, is amongst the list of the most exposed lenders.

"The plan of sporting PLN 4.5bn in dividend receipts does not seem to be threatened, although we do not treat it as a regime that needs to be met," Karpinski told journalists in Katowice, according to PAP. Should PKO not pay a dividend, Warsaww will not look to hike payouts from other state-controlled companies, Karpinski indicated.

At the beginning of April, PKO BP received a recommendation from the KNF to withhold paying out dividend from 2014 profit until the KNF determines additional capital requirements for the bank so as to reduce risks of exposure to Swiss franc mortgage loans.

Poland’s target of €1.13bn from dividend payouts from state controlled companies was agreed in mid-2014, several months before the Swiss franc’s sudden appreciation against the zloty that followed the Swiss National Bank’s removal of the Swiss currency’s cap on the euro. This caused repayments of some 550,000 Swiss franc-denominated loans to shoot up, increasing risk for lenders. 

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