ATB dividend will provide 0 million annually to Alberta

While subject to annual approval, Alberta Finance Minister Nate Horner said he’s ‘confident’ the dividend will be a steady revenue source

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ATB Financial is giving provincial coffers a $100-million boost in dividends beginning this budget year — a new revenue line Finance Minister Nate Horner is “confident” will continue in the coming years.

The money is on top of the $250 million to $430 million in annual earnings the Crown corporation returns to the province.

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ATB announced last Thursday it was declaring quarterly dividends totalling $100 million in fiscal 2025 to the Alberta government. The dividend still needs the go-ahead from ATB’s board of directors, though there’s little that would stand in the way of approval, said Curtis Stange, president and CEO of ATB Financial.

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The dividend will be paid out as $25 million quarterly.

“This dividend helps define the strength of our balance sheet and the forecast of future earnings,” Stange said in an interview.

ATB CEO Curtis Stange
Curtis Stange, president and CEO of ATB Financial, said the dividend “helps define the strength of our balance sheet.” Postmedia file photo

The dividend is included in the province’s target revenues for future budget cycles. However, it requires approval each year from ATB’s board of directors, which is based on a variety of factors related to the province’s economy and market volatility.

As its shareholder, the province collects annual earnings from ATB. In the 2022-23 budget year, Alberta raked in $428 million; that revenue is forecast to be $301 million for 2023-24 and $266 million this year.

The province is targeting $280 million in revenues for next year’s budget and $342 million the following year.

The annual $100-million dividend declaration would be added to those yearly earnings, meaning the province would collect $366 million from ATB in this budget cycle, should Alberta hit its earnings projections.

Horner, who tabled his first budget last week, said he’s “confident” it will be a consistent source of revenue for the province. Alberta is forecasting a slim $367 million surplus in the 2024-25 budget.

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“If they get in a position where they can’t (declare the dividend), we’ll look at that, but I’m confident. Their books have never looked better and they have a great growth trajectory to 2030,” Horner said. “I think it will be very sustainable.”

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Stange said he’s been in discussion with ATB’s board of directors for about two years on how to deploy the excess capital it has grown in recent years, particularly as energy companies have posted strong profits and returned money to shareholders.

“We’re seeing that within the energy industry right now, with that industry strengthening their balance sheets and they’re making payments back to their shareholders,” Stange said. “We felt it was good timing for us, so we approached the province to talk about the payment of a dividend.”

ATB is confident it will have the future income and earnings to pay its dividend to the province, Stange said.

But he said market conditions could also result in the payout being lower than $100 million.

“If there’s something that comes into play that would inhibit future earnings growth, then the board of directors might consider a lower dividend payment . . . or, should the economy be strong, perhaps the $100-million dividend is increased.”

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