According to PAP, Pawel Szalamacha, deputy State Treasury Minister has stated that the dividend from PKO BP's 2006 net profit should be at a similar level as last year (dividend payout of 46.1%, PLN 0.8 per share). The expected dividend payout ratio would equal to PLN 1.0 per share on our estimates.
Our view: Given the bank's high solvency ratio of 12.6%, we were forecasting the bank to pay PLN 1.42 per share (equating to a 67% payout ratio). We believe a high dividend payout is sustainable in the medium term and would expect a slightly negative trading impact. The foreign expansion plans of the bank (if such still exist) are not viewed favourably, given limited synergy, high implementation risk, and the possibility that the bank could overpay for assets.