The Polish retail broker, XTB has moved to scrape its proposed share buyback plan and distribute the record 2022 profits as dividends instead. The company wants to increase its dividend distribution to PLN 4.86 per share from the earlier proposed PLN 3.25 per share.

XTB Distributing Profits among Investors

XTB generated $171.6 million in net profits in 2022, which is a yearly jump of about 215 percent. Earlier, the management of XTB proposed the allocation of 75 percent of the profits to dividends and share repurchases while intending to set aside the remaining PLN 191.4 million ($43 million) as reserve capital.

The management wanted to pay 50 percent of the company's net profit as dividends and buyback shares with 25 percent of the profits. In 2021, the broker distributed PLN 1.5 per share as dividends, making the current proposal significantly higher.

A Higher Dividend Distribution Proposal

According to the latest press release from the broker, the management wants to allocate PLN 570.5 million for dividend distribution. The profit share proposed for reserve capital remains unchanged.

"The recommendation of the company's Management Board is in line with XTB's dividend policy, which assumes recommending the General Meeting to pay dividends at the level of 50 – 100% of the company's standalone net profit for a given financial year," XTB stated (translated from Polish).

The company added that the management considered factors like "the need to ensure an appropriate level of the Company's capital adequacy ratios and the capital necessary to development of the Group, as well as taking into account the guidelines of the Polish Financial Supervision Authority."

The XTB board are proposing 10 July as the dividend distribution date and 21 July as the dividend payment date.

XTB, which went public in 2016, witnessed a significant rally in its share price over the years. The market value of XTB shares doubled in the past year and is still lingering around the peak it hit earlier this month.

Meanwhile, last month, Jakub Zablocki, the Co-Founder of XTB, sold 7 million XTB shares, worth about $64 million at the time, through XX ZW Investment Group, a private investment firm owned by him.

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