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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 EUR 0.40 per share in two instalments. The first instalment of EUR 0.07 per share was paid out in March 2021.
The 2021 AGM authorised the Board to decide on an ordinary dividend of a maximum of EUR 0.72 (EUR 0.33 for 2019 and EUR 0.39 for 2020), to be distributed after September 2021. On 23 July 2021 the European Central Bank communicated that the recommendation to banks to limit dividends will expire on 30 September 2021. Given this the Board of Directors will on 1 October decide on the distribution of an ordinary dividend in accordance with the mandate received from the 2021 AGM. The ex-dividend date for the dividend payment is expected to be 4 October 2021 and the earliest payment date would be 12 October 2021.
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 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. In the case of the EUR 0.72 ordinary dividend for 2019-2020, this would be 1 October 2021.
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. The Board of Directors will on 1 October decide on the distribution of an ordinary dividend in accordance with the mandate received from the 2021 AGM. The ex-dividend date for the dividend payment is expected to be 4 October 2021 and the earliest payment date would be 12 October 2021.
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 or the day after Board decides on the dividend distribution. As we communicated on 16 September, the ex-dividend date for the EUR 0.72 ordinary dividend for 2019-2020 is expected to be 4 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.