The nation’s financial watchdog is currently in talks with Standard Chartered Bank Korea over the reduction of the bank’s planned payments of a high dividend of about 200 billion won to Standard Chartered Korea, officials said on Wednesday.

Of the dividend, Standard Chartered Korea is expected to remit about 150 billion won to the headquarters in the U.K, according to industry sources. The payout ratio would reach almost 80 percent for SC Bank considering that its net profit in the first half this year was 252.8 billion won.

Following the discussion with the Financial Supervisory Service, SC Bank will call a board meeting on Thursday to decide whether to adjust the dividend. Interest has been drawn to see if the bank will reduce the amount or not.

The FSS seems to see both SC Bank’s high dividend and Standard Chartered Korea’s high remittance to the U.K. problematic.

“Paying dividends should be done autonomously, so we are not specifying how much dividend it should pay. What we are saying is that it should be done within a range that won’t harm the bank’s health,” said a spokesperson at the FSS.

The FSS recently advised banks to restrain high dividends and strengthen internal reserves in preparation of urgent situations regarding the global financial crisis.

A PR official at SC Bank declined to answer if the bank will reduce the dividend.

“After purchasing First Bank in 2005, SC invested 4.4 trillion won in Korea to establish affiliate companies. It was the biggest amount of direct investment made by a foreign company. Compared to that, the dividend paid to Europe is relatively small,” said the official.

By Park Min-young (claire@heraldcorp.com)