⁍ The Bank of England’s request in March for banks to restrain dividend payments will not change the amount of payouts over the longer term.
⁍ Alex Brazier said it stopped about 8 billion pounds ($10.4 billion) leaving the sector at a time when the economy was going into lockdown to fight the pandemic.
⁍ The BoE regards payouts as an ‘important and necessary’ part of the functioning of the banking system.
– In March, the Bank of England asked Britain’s major banks to stop paying out billions in dividends, a request that was met with anger from investors. But the bank’s top financial official says the move won’t affect long-term payouts, Reuters reports. “This is a dividend delayed rather than a dividend destroyed forever. It does not change the amount of distributions banks will make over the long run,” Alex Brazier told an online event. “It does require a degree of patience from investors. It does require a lot of scrutiny. We need to take into account bank profitability and their ability to generate capital.” Britain’s banks are reluctant to tap their capital buffers for fear of raising market expectations of hefty cash calls.
Source: https://www.reuters.com/article/boe-banks/update-1-bank-of-england-says-banks-dividend-curb-wont-have-long-term-impact-idUSL1N2HJ27O