PZU Group’s Capital and Dividend Policy in 2016 – 2020 was adopted in a PZU Supervisory Board resolution in 2016. SECTION 7.9 CAPITAL MANAGEMENT. According to this Policy, the PZU Group endeavors to manage capital effectively and to maximize the rate of return on equity for the parent company’s shareholders, in particular by maintaining the level of security and retaining capital resources for strategic growth objectives through acquisitions.
PZU’s dividend policy rests on the following principles:
with a reservation that:
Payment of a dividend from the 2017 profits
On 28 June 2018, PZU’s Ordinary Shareholder Meeting adopted a resolution on the distribution of PZU’s net profit for the financial year ended 31 December 2017, in which it resolved to distribute the amount of PLN 2,159 million, or PLN 2.50 per share, as a dividend. The dividend record date was 12 September 2018. The dividend was paid on 3 October 2018.
PZU Group’s Dividend and Capital Policy
The Polish FSA’s recommendation on dividend payments from the profits generated in 2018
On 15 January 2019 the Polish Financial Supervisory Authority took a stance on the dividend policy of insurance and reinsurance undertakings.
As recommended by the regulatory authority, dividends should be paid only by insurance undertakings meeting certain financial criteria. At the same time, the dividend payout should be limited to no more than 75% of the profit earned in 2018, while the coverage of the capital requirement for the quarter in which the dividend was distributed should be maintained at no less than 110%.
At the same time, KNF permitted a dividend payout equal to the entire 2018 profit provided that the capital requirement coverage (after expected dividends are deducted from own funds) as at 31 December 2018 and for the quarter when the dividend is paid, is at least 175% for insurance undertakings operating in section I and at least 150% for insurance undertakings operating in section II.
The Polish FSA also recommended that the undertakings that satisfy the above criteria, when deciding on the level of dividends, should take into account the additional capital needs within the period of twelve months from the approval date of the 2018 financial statements, which may result, among others, from changes in the market and legal environment.
Up to the date of preparing this Report on the activities of the PZU Group, the Management Board has not adopted a resolution concerning the distribution of 2018 profit.
PZU’s earnings and dividend per share in 2010-2018
* the payout ratio net of the dividend payout from excess capital (PLN 2 per share)
** up to the date of preparing this Activity Report, the Management Board has not adopted a resolution concerning the proposed distribution of profit for 2018 Source: PZU data
Dividend distributions and PZU’s total shareholder return (TSR) (2010-2018)
Book value per share and gross accumulated dividend per share in PZU (PLN) (2010-2018)
* in 2013 a dividend was paid from excess capital (PLN 2 per share) Source: PZU data
Dividend paid by PZU from its earnings in the 2014-2018 financial years
|Consolidated profit attributable to the parent company (in PLN m)||3,213||2,895||1,935||2,343||2,968|
|PZU SA’s standalone profit (in PLN m)||2,712||2,459||1,573||2,249||2,637|
|Dividend paid for the year (in PLN m)||**||2,159||1,209||1,796||2,591|
|Dividend per share for the year (PLN)||**||2.5||1.4||2.08||3|
|Dividend per share on the date of record (PLN)||2.5||1.4||2.08||3||3.4|
|Ratio of dividend payout to consolidated profit attributable to the parent company***||**||74.20%||62.50%||76.70%||87.30%|
|(a) Movement in the share price y/y||4.10%||26.90%||-2.40%||-30.00%||8.30%|
|(b) Dividend yield during the year (%)*||5.90%||4.20%||6.10%||6.20%||7.60%|
|(a+b) Total Shareholder Return (TSR)||10.10%||31.20%||3.70%||-23.80%||15.80%|
* yield calculated as the dividend (as at the record date) in relation to the share price at the end of the previous reporting year
** up to the date of preparing this Activity Report, the Management Board has not adopted a resolution concerning the proposed distribution of profit for 2018
***not restated data for 2018