Bank Handlowy wants to pay extra dividends in '25 and '26 from retail business sale and undistributed profit

"We are in dialogue with the regulator and we intend to pay an extra dividend already this year from undistributed profits from previous years in the amount of PLN 450 million, and next year we would like to share the entire amount received for the sale of retail and also the remaining part of undistributed profits, about PLN 190 million," Bank Handlowy's CFO and deputy CEO Patrycjusz Wojcik announced.

He added that the bank is considering paying out all proceeds from the sale of retail banking segment of at least PLN 430 million (EUR 101 mln), plus profits from previous years, totalling PLN 640 million (EUR 151 mln), which would translate into extra dividends of up to PLN 1.1 billion (EUR 259 mln) over 2025 and 2026.

On Tuesday, May 27, Citi Handlowy announced that it had signed an agreement to sell its retail banking segment to VeloBank. The bank estimates that the sale of this business paves the way for its accelerated growth.

The bank said that the capital freed up by the transaction will be redirected to the institutional banking segment, which is expected to enable it to grow business volumes more rapidly in a favourable macroeconomic environment.

"This year, we will focus on preparing for the retail banking migration and activating new strategic directions. In the middle of 2026, we aim to close transactions and transfer the retail business to VeloBank and consistently accelerate growth in institutional banking," said the bank's CEO Elzbieta Czetwertynska.

"And 2027 will be the first full year in which we will operate in our target model as a global business bank," she added.

The CEO stressed that Citi wants to support strategic activities of energy transition projects and national security/defence. It also wants to assist clients in transforming their business models by providing dedicated ESG products and solutions.

The bank's new strategy until 2027 targets a return on equity of around 19 percent, a return on assets of 2.6 percent, and a cost-to-income ratio is to be below 30 percent.

"As before, we plan to pay regular dividends to shareholders. We are consistent and predictable here (...)" said CFO Wojcik, adding that the bank would like to pay a dividend of 75-100 percent of profit.

The sale to VeloBank will be carried out through a spinoff of an organised part of the company, where Citi Handlowy will receive VeloBank shares in exchange for the transfer of the object of the transaction. VeloBank shareholders will immediately repurchase the VeloBank shares transferred to Citi Handlowy, for an agreed amount.

The estimated value of the transaction to the shareholders is approximately PLN 1.1 billion (EUR 259 mln), and consists of a fixed price component estimated at PLN 432 million (EUR 101.8 mln), a variable price component of up to PLN 100 million (EUR 23.56 mln) payable on the closing date (dependent on business volumes) and a release of the capital surplus, by far allocated to retail banking and profits generated by the object of the transaction up to the closing date totalling approximately PLN 570 million (EUR 134.3 mln).

Completion of the transaction is subject to the fulfilment of the conditions precedent set out in the agreement and receiving the relevant regulatory approvals. It is slated to be finalised by mid-2026.

In the second quarter of 2025, the bank is expected to recognise a one-off net loss from the transaction of approximately PLN 380 million (EUR 89.53 mln).

seb/ nl/ ao/