Russian OTP Bank intends to pay dividends to shareholders in the amount of 10.6 billion rubles, it follows from messages credit organization on the website of the corporate information disclosure center. The bank received approval from the Central Bank, stated Kommersant at the headquarters of the parent Hungarian group OTP.
“This payment reflects 17 years of effective operation of the bank, which to date has led to the formation of significant financial surpluses,” OTP commented on the decision.
As the publication notes, this is the first time in recent times that a Russian bank pays dividends to shareholders from unfriendly jurisdictions. OTP Bank Plc owns 66.2% of OTP Bank, and 31.7% belongs to the Russian LLC Alliance Reserve, 100% owned by the Hungarian bank. According to OTP materials, the profit of the Russian bank in the first half of the year amounted to 11.8 billion rubles.
Partner at Prospekt AB Oleg Bychkov, in a conversation with the newspaper, drew attention to the fact that it is unclear whether this gives permission from the regulator to transfer profits outside of Russia. In his opinion, some of the funds may be allowed to be distributed to a type C account, and some may be paid directly.
Restrictions on dividend payments for investors from unfriendly countries have been in effect since the spring of 2022. The presidential decree established a temporary procedure for transactions with Russian assets by foreign entities associated with unfriendly countries. This document also introduces the condition that all payments are made through special ruble accounts of type “C”. They accumulate income from securities owned by unfriendly non-residents, as well as funds from other transactions with Russian assets. They can be converted into currency only with the permission of the legal commission.
The Ministry of Finance and the Bank of Russia earlier in August softened the conditions for transferring dividends to residents of unfriendly countries, Vedomosti wrote. Payments can be made without restrictions, subject to capital investment in the Russian economy, and the amount of dividends should not exceed capital investment. Investments in the Russian economy will be taken into account starting from April 1, 2023 – we are talking about expanding production volumes and developing new technologies. The distribution of profits will still require the approval of the subcommittee.
Previously, companies could obtain permission from the legal commission to pay dividends to residents of unfriendly countries if a number of conditions were met. For example, the size of the payment could not exceed 50% of the profit for the previous year; shareholders must be ready to continue commercial activities in Russia, as well as meet key performance indicators agreed with the Central Bank.