BCP may use the 2018 profits to pay dividends

  • ECO News
  • 16 January 2017

The prospectus for BCP’s capital increase was approved this Thursday by CMVM. The bank will accelerate the return to normalization and intends to start repaying dividends based on the 2018 accounts.

The Portuguese bank BCP wants to accelerate the return to normalization of their activities and intends to start repaying dividends according to the results the bank is able to achieve in 2018. The main goal is to distribute at least 40% of the profit amongst the shareholders.

The information was disclosed on the presentation made to investors concerning BCP’s capital increase of 1,300 million euros; the prospectus was approved this Thursday by the Portuguese Securities Market Commission (CMVM).

Aside from reimbursing the remaining 700 million euros in State CoCos and strengthening of the balance sheet, the capital ratio increase to a level higher than 11% will allow the bank to attempt to convince investors to take part in the capital increase operation, which has an attractive shareholder remuneration policy.

The bank points to a “potential return to dividend payment with an intended pay-out ratio of 40% or more by 2018, subject to regulatory requirements”. This perspective considers the expectation the bank has of being able to return to normality in 2018.

Additionally, BCP aims to strengthen its equity base: they aim for a target ROE (Return on Equity) of around 10%.

BCP has not paid dividends since 2012; DBRS highlighted that fact this Thursday, stating the shareholder remuneration policy restriction ends with the help of the state’s reimbursement.