Some Czech banks announced plans to share part of their 2019 and 2020 profits with shareholders after the country's central bank relaxed COVID-19-related dividend restrictions, and further payouts are lined up for 2022.
The central bank, in line with regulators in other countries, restricted dividend payouts following the 2020 outbreak of the pandemic to encourage banks to preserve capital. But in September 2021, after assessing their capital and risk profiles, it officially allowed partial payouts from 2019 and 2020 profits, subject to approval. They will also no longer be capped using a restrictive formula unveiled in March.
Moneta Money Bank a.s. received approval from the regulator to distribute 1.5 billion koruny, or 3 koruny per share, from 2019 and 2020 profits. It previously paid a semiannual dividend of 3.30 koruny per share in December 2019. Moneta said it remains committed to its dividend policy of paying at least 70% of net profit to shareholders, depending on market conditions and applicable restrictions. Komercní banka a.s., the country's third-largest lender and a subsidiary of France's Société Générale SA, plans to pay out 4.5 billion koruny, or 23.86 koruny per share.
Both banks will seek shareholder approval for the payouts in the fourth quarter.
The Czech Republic's biggest bank by assets, Ceskoslovenská obchodní banka a. s., received approval from the central bank to pay out 4.1 billion koruny in dividends in 2021. A spokesman for the bank told the ČTK news agency that, in 2022, the lender will pay its regular dividend from 2021 results and the remaining profits retained in 2019 and 2020. Ceskoslovenská obchodní banka is owned by Belgian bank KBC Group NV.
Other big Czech banks, including Erste Group Bank AG unit Ceská sporitelna a. s., Raiffeisen Bank International AG subsidiary Raiffeisenbank a.s. and UniCredit SpA unit UniCredit Bank Czech Republic and Slovakia a.s. have not made public announcements regarding their dividend plans.
The central bank estimated that the total amount paid out could reach about 15% of the banking sector's total profit for 2019 and 2020. This exceeded 138 billion koruny, or about $6.35 billion, according to the ČIA News agency.
While lifting dividend restrictions with regard to future profits, the central bank asked lenders to wait until their final 2021 financial results are available and the impact of COVID-19 in the winter is known before considering payouts.
Banks operating in the Czech Republic earned 31.1 billion koruny in the first half of 2021, up by 4.5 billion koruny year over year. Cyrrus analyst Tomáš Pfeiler, cited by the ČTK news agency, attributed the improved financial performance to lower costs of risk, strong demand for new loans, especially mortgages, and cost discipline at banks.
Komerční banka earned 5.2 billion koruny in the first half of 2021, and the net earnings of Československá obchodní banka reached 6.6 billion koruny during the same period. Moneta Money Bank earned 1.4 billion koruny for the first half, up 19.3% year over year, and raised its full-year profit guidance to 3 billion koruny.
As of Sept. 28, US$1 was equivalent to 21.83 Czech koruny.