Shareholder's question

Did the management not see the challenges Nordea would bring to Sampo’s dividend payment capacity or did you not want to admit this to the owners thanks to the ambitious and personal endeavor for ever-increasing dividends by CEO Stadigh?

On 24 October 2019, Nordea announced a significant change in its dividend policy. According to the new policy, a dividend pay-out ratio, starting from 2020, would be 60–70 per cent in contrast to the earlier policy of aiming at achieving a yearly increase in the dividend per share. Due to the lower pay-out ratio, Sampo’s dividends from Nordea are likely to be smaller than expected during the next few years. Together with the increasingly difficult operating environment, with government bond yields expected to remain negative for some time to come, Sampo disclosed its changed view on the dividends the very same day. Sampo’s management no longer thought the company’s and its shareholders’ interests were best served by an increase in the dividend. Simultaneously company communicated that the Board would review the dividend policy in early February 2020. The new dividend policy was disclosed on 6 February 2020.

In other words, Sampo reacted to Nordea’s changed dividend policy with a dividend cut as soon as it was informed about it.