RHB sets 30% dividend payout policy amid strong fundamentals

This article first appeared in The Edge Financial Daily, on February 28, 2019.
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KUALA LUMPUR: RHB Bank Bhd has set a dividend payout ratio policy of 30% of its net profit, backed by its improving financial performance and strong capital ratio.

For the financial year ended Dec 31, 2018 (FY18), the group announced a final cash dividend of 13 sen per share, translating to a higher payout of 35.7% compared with 30.8% a year earlier.

Including the 7.5 sen interim dividend announced earlier in the year, the total dividend payment for FY18 totalled 20.5 sen, the highest quantum of payment since FY12’s total dividend payment of 22.1 sen per share.

“Going forward, our dividend payments will be a minimum 30% of net profit. Obviously we will try to exceed that. We used to have a payout policy of between 20% and 30% but now we are a bit bolder, given our improving performance and strong capital ratio,” said RHB managing director Datuk Khairussaleh Ramli.

He said the group’s common equity tier-1 (CET-1) and total capital ratio ex-dividend are among the highest in the industry, at 15.49% and 18.78% respectively as at end-2018.