Citibank Korea said Wednesday it plans to pay out an interim dividend worth some 827.5 billion won ($731.3 million) in cash to its Delaware-based US parent company Citibank Overseas Investment Corporation.
The payout to COIC, an indirect subsidiary of New York-based Citigroup, will be executed by end-2018, according to the US investment banking giant‘s Korean banking unit. The decision came after a board of directors’ meeting Wednesday attended by four outside directors.
The dividend payout is part of a “capital optimization plan” to address its excessive cash retention, Citibank Korea Chief Executive Park Jin-hei said in a letter to staff and executives.
This came amid a high BIS capital adequacy ratio at 20.1 percent as of end-September, whereas the banking unit’s return on equity, an indicator of capital efficiency, came to 3.2 percent, according to the lender’s preliminary financial statement unveiled Wednesday. Park expected the BIS ratio to remain above 17.7 percent after the dividend payout.
Park added the payout was designed to “repay our headquarters for the support during the Global Financial crisis,” recalling Citigroup’s $800 million injection in cash in 2008 to the Korean banking arm.
By Son Ji-hyoung