Moscow Exchange boosts dividend payout floor to 55% of net profit

By Andrei Skvarsky.

Moscow Exchange has announced that, from this year onwards, it will allocate a minimum of 55% of its net profit as calculated under international financial reporting standards for dividend payouts to its shareholders.

The new dividend policy was approved at a meeting of the exchange’s supervisory board. The bourse used 55.12% of its net profit for 2014 as calculated under IFRS to pay dividends, the target having been 50%. The payments were made this spring.

“Moscow Exchange’s updated dividend policy underscores the record payout ratio that the Company achieved in 2014, when we returned 55% of net profit to shareholders, against a target of 50%,” a statement from the exchange quoted its chief executive, Alexander Afanasiev, as saying.

“This now forms the floor for future dividends. Other fundamentals of the policy remain unchanged: the percentage of net profit available for dividends will be determined by the capital needs of the Exchange’s subsidiaries, primarily the NCC Clearing Bank, which acts as the Central Counterparty, as well as funding requirements for capital investments into IT infrastructure and potential acquisitions. This means we will continue to balance dividend payouts with business development needs and our goal of minimising financial and operational risks for market participants.”

The new rise of the dividend payout floor is remarkable – for instance, a mere 4.26% of the net profit for 2009, 5.22% for the 2008 profit and 6.76% of the 2007 profit was used for the purpose.

The supervisory board also approved the management’s proposal for Moscow Exchange to exit from its subsidiaries in Ukraine and to possibly invest in a planned new Russian credit rating agency, the statement said.

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