March 30 (SeeNews) - Croatia's Erste&Steiermarkische Bank said it is reversing an earlier plan to distribute part of its 2019 net profit as dividend, in order to comply with a recent order by the country's central bank prompted by the coronavirus disease outbreak.
Instead, the bank will now retain all of its last year's earnings, Erste&Steiermarkische said in a statement last week.
The bank's original plan was to pay out as dividend an overall 227 million kuna ($40.3 million/36.4 million euro), or 13.37 kuna per share, out of its 752.5 million kuna net profit for last year and retain the remainder.
On March 20, Croatia's central bank said it has barred local lenders from distributing dividend for last year, as part of broader measures aimed to ensure that the liquidity of the banking system will support the domestic economy amidst the ongoing coronavirus crisis.
"In accordance with the aforementioned decision, the Bank is obliged to retain its net profit realized in the financial year 2019 in the Bank’s capital and shall not pay out the dividend in order to ensure the stability of the financial system of the Republic of Croatia," Erste&Steiermarkische Bank said in a statement with the Zagreb bourse last week.
The central bank also said it believes that banks should contribute to the efforts aimed at alleviating the social and economic consequences of the coronavirus pandemic.
Last year, Erste&Steiermaerkische Bank distributed as dividend a total of 288.7 million kuna of its 2018 net profit of 829.7 million kuna, and retained the remainder. Thus, it paid to its shareholders 17 kuna per share.
The lender is a unit of Austria's Erste Group Bank.
(1 euro = 7.61696 kuna)
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