XTB Seeks to Cancel Share Buyback to Boost Dividends

XTB, a retail broker based in Poland, has decided to cancel its planned share buyback program and distribute its 2022 profits as dividends instead. The company aims to boost its dividend distribution from PLN 3.25 per share to PLN 4.86 per share.

In 2022, XTB made a net profit of $171.6 million, marking a 215% yearly increase. The management of XTB suggested that 75% of the profits be allocated for dividends and share repurchases, with the remaining $43 million being set aside as reserve capital.

The management proposed distributing 50% of the company’s net profit as dividends and using 25% of the profit to buy back shares. The broker distributed PLN 1.5 per share as dividends for 2021, significantly higher than the proposed amount.

A Higher Dividend Distribution Proposal

The broker’s latest press release states that management plans to distribute PLN 570.5 million as dividends. The proposed profit share for reserve capital has remained the same.

According to XTB’s dividend policy, the Management Board’s recommendation is consistent. The policy suggests that dividends should be recommended to the General Meeting at 50-100% of the company’s standalone net profit for a given financial year, as stated by XTB in a translated Polish statement.

According to the company, the management took into account various factors such as maintaining an appropriate level of the company’s capital adequacy ratios, providing necessary capital for the development of the group, and following the guidelines of the Polish Financial Supervision Authority.

The proposed dates for the XTB dividend distribution and payment are July 10th and July 21st, respectively.

XTB went public in 2016 and experienced a substantial increase in its share price over time. The value of XTB shares has doubled in the last year and is currently at the same high point it reached earlier this month.

Last month, Jakub Zablocki, the Co-Founder of XTB, sold 7 million XTB shares via a private investment firm, XX ZW Investment Group, which he owns. The shares were worth approximately $64 million during the sale.