CTBC Financial Holding Co (中信金控) on Friday last week said its board has approved a proposal to distribute a cash dividend of NT$1.08 per common share, higher than the NT$1 it paid last year.
The proposed dividend, if approved by shareholders on June 15, would be equivalent to a payout ratio of 56.54 percent, based on last year’s earnings per share of NT$1.91.
The company aims to maintain a high payout ratio policy to reward its shareholders and boost its stock price, head of financial management Chiu Ya-ling (邱雅玲) said.
There is general enthusiasm among local investors for high-dividend stocks, but for CTBC Financial, investors have historically boosted the company’s stock price after issuance of high cash dividends, Chiu said.
CTBC shares on Friday closed 0.47 percent higher at NT$21.35 in Taipei trading, expanding this year’s gain to 4.15 percent and beating the broader market’s 0.84 percent decline over the period.
Beginning last year, the financial service provider began issuing only cash dividend payouts, no stock dividend payouts, Chiu said.
The company’s dividend policy is to focus on cash payments and it hopes that in doing so, it could keep its share capital from increasing, as long as its capital adequacy ratio remains sufficiently strong, she said.
CTBC Financial’s dividend payout plan came a day after Cathay Financial Holding Co (國泰金控) and Fubon Financial Holding Co (富邦金控) announced their dividend proposals.
Cathay Financial said it plans to distribute a cash dividend of NT$2.5 per share, the highest among the nation’s 15 financial holding companies, while Fubon Financial was second with a planned cash dividend of NT$2.3 per share.
State-run Mega Financial Holding Co (兆豐金控) took third place with a proposed cash dividend of NT$1.5 per share, followed by CTBC Financial’s NT$1.08 and First Financial Holding Co’s (第一金控) NT$0.9.
Taiwan Cooperative Financial Holding Co (合庫金控), Waterland Financial Holdings Co (國票金控), E.Sun Financial Holding Co (玉山金控), Yuanta Financial Holding Co (元大金控), Taishin Financial Holding Co (台新金控) and Jih Sun Financial Holding Co (日盛金控) are planning cash dividends of between NT$0.5 and NT$0.75, while Shin Kong Financial Holding Co (新光金控) is considering a cash dividend of NT$0.35.
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