May 17, 2017 / 11:21 AM / 8 months ago

UPDATE 1-New CEO of Polish insurer PZU sticks to existing group strategy

(Adds quotes on dividend)

WARSAW, May 17 (Reuters) - Polish state-run insurer PZU said it will stick to the group’s existing strategy under new CEO Pawel Surowka, and a dividend payout of at least 50 percent of net profit this year.

Surowka became CEO of eastern Europe’s largest insurer last month, but as deputy CEO previously he was involved in drawing up the group’s strategy that was announced last August.

“We have all participated in work on the strategy, we stick to it,” Surowka told a news conference.

The strategy includes cost cutting and PZU, which employs more than 23,000 people, announced in March that it planned to cut up to 956 jobs by mid-December.

Chief Financial Officer Tomasz Kulik told Wednesday’s news conference that the company still planned to pay more than 50 percent of net profit in dividends this year, even after setting money aside for potential acquisitions and for its planned 3 billion zloty ($795 million) bond issue, announced in March.

PZU’s long-term dividend policy assumes that up to 20 percent of net profit is kept for growth and innovation projects; at least 50 percent is used to pay dividends, while the rest may be paid out as a dividend, or withheld in the case of takeovers.

“(The dividend policy for this year) provides for an option to withhold part of net profit for an acquisition opportunity. We will probably consider keeping part of this pool, as we have some plans regarding rebuilding our capital position through issuing a subordinated instrument on the Polish market,” Kulik said.

“(This) would allow us to pay a slightly higher dividend than ... only 50 percent,” he added.

Kulik later told reporters that it could be as high as 80 percent of net profit.

“I assume it won’t be 50 percent: between 50 and 80 percent. We wouldn’t like to communicate at this stage whether it will be 65 percent, or 60 percent, or 70 percent,” he said.

PZU agreed last year to buy a stake in Poland’s second largest lender bank Pekao SA and the transaction will be finalised at the beginning of June.

$1 = 3.7748 zlotys Reporting by Marcin Goclowski; Writing by Agnieszka Barteczko; Editing by Lidia Kelly and Susan Fenton

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