* Mulls bond issue for acquisitions, dividend
* Offers PLN 4.66 bln dividend from 2013 profits
* Expects growth in gross premiums in coming quarters
(Recasts, adds CFO comment, share price)
By Adrian Krajewski
WARSAW, May 14 Poland's PZU, eastern
Europe's largest insurer, on Wednesday proposed to increase its
dividend payout on last year's earnings to 54 zlotys per share -
the biggest payout since its market debut in 2010 - to boost
The state-controlled group's dividend proposal will amount
to 4.66 billion zlotys ($1.5 billion) in total. PZU also said it
could raise up to 500 million euros ($685.3 million) via a bond
issue to fund acquisitions and free up capital for dividends.
"PZU's policy for the years 2013-2015 aims at raising total
shareholder return," PZU said in a statement. The insurer said
it planned dividend payouts of up to 100 percent of its net
profit, bolstered by up to 3 billion zlotys from excess capital.
PZU's shares were up 2.2 percent by 1243 GMT.
The group, which has about a third of Poland's insurance
market, has been trying to expand via acquisition to help to
defend its market share against rivals such as Germany's Talanx
, which owns insurance group Warta in Poland.
PZU, with a stock market value of $12 billion, last month
bought the bulk of British insurer RSA's eastern
European operations for some 360 million euros in its biggest
The company also said it had purchased the medical business
from Poland's No.1 refiner PKN Orlen for 48 million
zlotys to support its insurance offer with health services.
PZU said it would consider a senior bond issue to raise
300-500 million euros this year to finance the RSA purchase.
It is also looking at possibly raising money via a subordinated
bond deal, but is waiting for a green light from regulators,
which may come as late as next year.
PZU wants to split its dividend payout from 2013 profits to
meet its own and regulatory capital requirements. Following an
interim dividend payout of 20 zlotys per share last year, PZU
plans to distribute 17 zlotys per share in September and another
17 zlotys per share in January 2015.
"The split would allow us to propose a dividend from 2014
higher than 75 percent of the annual profit," PZU CFO Przemyslaw
The insurer reported a larger-than-expected 9 percent fall
in its first-quarter net profit to 760.4 million zlotys, hit by
one-offs and a 1.6 percent dip in gross written premiums to
4.354 billion zlotys.
PZU now expects gross written premiums to grow in the coming
"The market should grow by up to 1 percent this year when it
comes to gross written premiums," Dabrowski said. "PZU wants to
move in line with the market. The coming quarters should rather
show growth in annual gross premiums at PZU."
($1 = 3.0501 Polish Zlotys)
($1 = 0.7296 Euros)
(Editing by Jane Merriman)