Commerzbank AG is planning to pay a dividend and buy back shares as it joins European peers in rewarding investors after a long hiatus in payouts.
(Bloomberg) — Commerzbank AG is planning to pay a dividend and buy back shares as it joins European peers in rewarding investors after a long hiatus in payouts.
The German lender is proposing a dividend of €0.20 ($0.21) per share on last year’s profit, according to a statement Wednesday. It has also asked the European Central Bank and the German Finance Agency, which manages the stake in the lender that’s still held by the government, for approval of a buyback plan to meet a target of paying out 30% of last year’s profit.
Commerzbank Chief Executive Officer Manfred Knof has promised to return as much as €5 billion to shareholders over the next few years as he seeks to return the lender to a competitive level of profitability. The bank has paid dividends only twice since it was bailed out by the government during the financial crisis.Â
The bank didn’t say how much it plans to return through buybacks. It has previously said that buybacks will likely be an element of the distribution policy but stopped short of giving details on the amount and timing.
While Commerzbank is slated to publish fourth-quarter earnings on Thursday, it has already announced a pretax profit of €2.01 billion for last year. Analysts expect net income of €1.7 billion, which would imply total payouts to investors of about €500 million, given the 30% target.
A dividend of €0.20 per share would amount to about €250 million, meaning a similar amount could be returned through buybacks. That’s based on roughly 1.25 billion outstanding Commerzbank shares, according to data compiled by Bloomberg.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.