On Friday, ZABA published a document detailing its dividend proposal. In total, the SB and MB of ZABA proposed EUR 1.69 DPS, which at the closing price before the announcement represents a DY of 16.3%. Ex-date is set for 12 April 2023, while the payment date is set for 8 May 2023. ZABA also announced the intention to buy 120k shares on the market until the end of 2023, with a maximum value of EUR 1.3m.

According to a document published by ZABA on the Zagreb Stock Exchange on Friday, 24 February 2023, the Supervisory and Management Boards of ZABA proposed the distribution of profit, which will be decided on the General Meeting of Shareholders (GSM), on 5 April 2023.

The distribution of profit is as follows: EUR 0.74 per share will be paid out from the net profit of the Bank in 2022 (with a 100% payout ratio), implying a DY of 7.14%. At the same time, ZABA also decided to pay out EUR 0.95 per share out of the retained earnings, implying a DY of 9.13%. This would also mean that out of the retained earnings of EUR 824.2m, EUR 304.2m will be paid out, implying a payout ratio of 36.9%.

If approved, this would together yield a dividend yield of c. 16.3%, marking one of the largest dividend yields currently available on any share, especially in Croatia.

ZABA dividend per share (EUR)* & dividend yield (%) (2012 – 2023)

Source: ZABA, InterCapital Research

*DPS (HRK) for 2012-2022 divided by the medium EUR/HRK exchange rate by the Croatian National Bank for those years

As a reminder, ZABA recently publishes its FY 2022 results, with solid growth across both revenue & profit lines. If you want to read more about the latest results, click here. As a result of the dividend proposal news, ZABA’s share price increased by 13.9% on Friday, closing the day at EUR 11.85.

ZABA share price (2015 – 2023 YTD, EUR)

Source: Bloomberg, InterCapital Research

On Friday, ZABA also published a notification of an intent to launch their share buyback program. According to the notice, until 31 December 2023, ZABA plans to buy a maximum of 120k shares on the market, under certain conditions. Firstly, the price for which they buy the shares cannot be 10% higher/lower than the average market price on the day before any given transaction. Secondly, the shares can either be bought directly on the exchange or through block trades. Thirdly, the maximum amount set aside for the purchase of own shares is EUR 1.3m. They also note that they will start the buyback after receiving the required authority from the GSM.