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What is Danske Bank’s dividend policy?

April 26, 2017Bank danske dividend policy

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What is Danske Bank’s dividend policy?

3 Answers

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Danske Bank aims to maintain a payout ratio of 30%-50%. The payout ratio is the percentage of net profit paid out as dividends. The dividend for 2007 was DKr8.50 per share. On October 6, 2008, the Danish government launched a two-year guarantee covering all deposits with and unsecured claims against Danish financial institutions. The participants in this gaurantee have agreed not to pay dividends during this period. Hence, Danske Bank will not pay dividend in 2008 and 2009.

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On 6 October 2008, the Danish state issued a 2-year guarantee on all deposits with and simple obligations of Danish financial institutions. Because of this arrangement, Danish banks may not pay out dividends during the period of the guarantee. This means that Danske Bank may not pay out dividends before 30 September 2010. The Group has not yet determined its dividend policy for the period after this date.

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With due consideration to the Group’s capital needs, the Board of Directors wishes to distribute up to one third of the net profit for the year, assuming that the dividend payments do not result in an increase in the interest payments on the hybrid capital raised from the Danish state.