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UPDATE 1-Russia's Sberbank plans to pay 50% of net profit in dividends, says CEO

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MOSCOW, Aug 21 (Reuters) - Sberbank, Russia’s largest lender, plans to pay shareholders dividends amounting to 50% of its 2019 net profit, its chief executive said on Friday.

Dividend payouts by Russian banks have been in focus as lenders have been hit by the coronavirus crisis and its effect on the economy, with the central bank warning in April that financial organisations should pay 2019 dividends only if their capital was sufficient in the medium term.

Sberbank CEO German Gref said the dividend payout would total 422 billion roubles ($5.67 billion) and that the bank will present new strategy containing dividend guidance closer to the end of the year.

The bank’s chief financial officer last month said that Sberbank planned to pay dividends in the third or fourth quarter of the year. Gref did not specify when the dividend payout would be made.

Sberbank’s shares turned positive after Gref’s announcement, rising 1.4%.

Despite net profit falling 33.4% in the second quarter, Sberbank had said last month that it saw no reason to change its plan to pay 50% of its net profit as dividends.

Gref said Sberbank had been able to pay these dividends because of its capital adequacy ratio, which he said was above its own target of 12.5% and comfortably better than the minimum level required by the central bank.

VTB, Russia’s second-largest bank, said earlier on Friday that its management board had recommended 2019 dividends equating to 10% of net profit, rather than the 50% it had initially planned. ($1 = 74.4679 roubles) (Reporting by Tatiana Voronova; Additional reporting by Andrey Ostroukh Writing by Gabrielle Tétrault-Farber Editing by David Goodman)

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