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Nordea's dividend policy stipulates a dividend payout ratio of 60-70%, applicable to profit generated from 1 January 2021. Nordea will continuously assess the opportunity to use share buy-backs as a tool to distribute excess capital.
For 2019 Nordea pays out in total out EUR 0.40 per share in two instalments. The first instalment of EUR 0.07 per share was paid out in March 2021.
Nordea's Board will, mandated by the AGM 2021, decide on distribution of the second instalment (EUR 0.33 per share) and the 2020 dividend (EUR 0.39 per share), in total EUR 0.72 per share, at the earliest in October 2021.
The timing is based on ECB's current recommendation on banks' dividends.
Nordea's Board of Directors decided to follow the ECB's recommendation and pay out a maximum of the 15% of 2019-2020 profit. In Nordea's case this corresponded to EUR 0.07 per share.
Please read the stock exchange release from 18 February 2021
A shareholder that holds the share on the register date is entitled to the dividend. In other words, if you own or buy the share the same day as Nordea's AGM or Board decides on the dividend you are entitled to the dividend.
A shareholder that holds the share on the register date is entitled to receive the dividend. In other words, if you own or buy the share the same day as Nordea's AGM or Board decides on the dividend distribution you are entitled to the dividend.
Unfortunately not. You need to be a holder of the share on the day that the dividend decision is made, i.e. when the Board decides on the dividend. This will take place at the earliest in October 2021 with the ECB's current recommendation.
Normally, the AGM decides on the dividend but due to the COVID-19 situation, Nordea's AGM followed ECB's recommendation on banks' dividends and mandated Nordea's Board of Directors to decide on it later. ECB updated its recommendation in December 2020 allowing banks to pay-out a maximum of 15% of the 2019-2020 profit (read Stock Exchange release here 16 December 2020 . Accordingly, Nordea's Board of Directors decided (read stock exchange release here 18 February 2021) to distribute only 15% of the 2019 profit or EUR 0.07 per share in March 2021.
The ex-dividend date is usually the day after the Annual General Meeting (AGM) has convened and, amongst other issues, decided on the dividend payout.
In 2020 Nordea's AGM mandated Nordea's Board of Directors to decide on the dividend. Accordingly, the ex-dividend date was the day after the Board decided on the dividend distribution. In other words, Nordea's Board decided 18 February 2021 on the distribution of the first instalment of the 2019 dividend, as ECB recommended, 15% of the 2019 profit i.e. EUR 0.07 per share. So for the first instalment of the 2019 dividend, the ex-dividend date was 19 February 2021.
On the basis of the ECB's current recommendation on banks' distribution of profit, Nordea's Board may decide on the second instalment of the 2019 dividend (EUR 0.33) and the 2020 dividend (EUR 0.39) at the earliest in October 2021.
The new Finnish withholding tax legislation entered into force on 1 January 2021. This has an impact on all shareholders resident outside Finland holding Finnish securities in a bank outside Finland. The new regulation includes detailed provisions on when tax treaty based withholding rates can be applied to dividends at the payment stage. More details of the new legislation available on the Finnish tax authorities’ website here
Due to the new taxation model and new provision to tax liability there will be limitations to apply relief at source at dividend payments. In the cases where relief at source cannot be applied a 35% maximum tax will be withheld. Over-withheld tax can be reclaimed from the Finnish tax authority after the dividend payment year has ended. Further information of the reclaim process available here
All shareholders are encouraged to obtain information regarding local practises related to the new withholding tax regulation from the custodian bank that holds the shares.