Eurozone Banks Halt Dividend Payments Due to Covid-19

26 May 2020 Eurozone banks called off payments of roughly €27.5 billion in dividends after the European Central Bank’s (ECB) recommendation to retain profits to increase the sector’s capital in the face of the current lockdown. The ECB recommended that banks not pay dividends for the 2019 and 2020 financial years while the pandemic lasts.

Of the total amount of dividends the banks planned on disbursing for the 2019 financial year, more than three-quarters, or approximately 27.5 billion euros, were retained. The financial institutions had already paid out €6.2 billion in dividends when the ECB issued the recommendation.

Portuguese banks that cancelled dividend payments include the Caixa Geral de Depósitos, BCP, Santander and BPI. The four banks have already provisioned more than 200 million euros as a buffer for the deteriorating economic scenario.

Original Story: Economia Online – Alberto Teixeira

Translation/Summary: Richard D. Turner

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