Public Bank Bhd (1295) aims to keep paying half of its net profit as dividend this year despite concerns that stricter global rules may require banks to keep more shareholders money in future.
"Our cash payout ratio last year was about 57 per cent. We are looking to try and maintain that level, at around 50 per cent," chief operating officer Leong Kwok Nyem told reporters after its annual shareholders' meeting in Kuala Lumpur yesterday.
He added that the dividend plan is subject to Bank Negara Malaysia's approval and any new developments in the Basel 3 framework, which is still under discussions globally.
The new global rules may require banks to hold more shareholders fund.
Still, the total dividend payout may be lower this year in terms of percentage, as it also gave out treasury shares in the past two years.
The country's third largest lender last year paid a gross cash dividend of 55 sen per share, and a share dividend that equals to 22.2 sen based on its share price at the end of the year. This brought the total dividend payout to 79.3 per cent of its net profit in 2009.
The bank, which distributed 146 million treasury shares in the past two years, is left with 29 million treasury shares. It could return this to shareholders this year to boost dividend, but the number is quite small, Leong said.
"We will look at the appropriate level of dividends for the current year," he said.
Leong said the bank has no plans to raise new capital this year, saying that it is premature to prepare for stricter capital rules under Basel 3, which is still in the early stages of discussion.
Banks are only required to provide feedback to the Basel committee by April this year and there will be further rounds of consultation by the committee before the next draft of the proposal is expected by the year-end. The new rules will not come into effect until end-2012.
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