According to Reuters, Komercni Banka’s CEO Henri Bonnet has stated that the bank could sustain a dividend payout in a range of 60% to 70% over the medium term, unless any further regulations concerning higher capital requirements appear. The CEO also stated that the bank’s priority is to maintain a strong capital buffer as well as the ability to finance its lending and business activities including potential acquisitions.
We view the news as a reiteration of earlier statements as well as common practice at Komercni Banka, which usually pays dividends within this range. We expect the bank’s DPS at CZK 210 (63% payout) in 2013, which is below the Bloomberg consensus for a DPS of CZK 242 per share (68% payout based on consensus EPS). We expect the news to have a neutral trading impact today.