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Bank Handlowy eyes minimum 75% dividend payout ratio, 10% ROE

Bank Handlowy w Warszawie SA will continue to allocate most of its earnings toward dividend payments, and has set its payout ratio for dividends at no less than 75% of its net profits between 2018 and 2021.

The Polish unit of Citigroup Inc. said Dec. 7 its new guidelines take into account the Polish Financial Supervision Authority's March recommendations for midterm dividend policy of local lenders, as well as the bank's new 2021 strategy, recently approved by its supervisory board.

The lender will strive to maintain a return on equity ratio above 10% as part of its new strategy, excluding future legal, regulatory and tax events, which may have an impact on achieving the ROE target. Handlowy will also target a high-single-digit compound annual growth lending rate in the retail segment and mid-single-digit growth lending rate in the institutional banking segment, while also eyeing a high-single-digit growth in revenue from customer business.

Handlowy and Bank Pekao SA are the only Polish lenders that have in recent years received regulatory approval to share almost all of their earnings with shareholders.

The total value of dividend payments from Handlowy's 2017 earnings amounted to 537 million Polish zlotys, equivalent to 99.98% of its stand-alone net profit for the year.

As of Dec. 7, US$1 was equivalent to 3.77 Polish zlotys.