Advertisement

  • News
  • Columns
  • Interviews
  • BW Communities
  • Events
  • BW TV
  • Subscribe to Print
  • Editorial Calendar 19-20
BW Businessworld

South Africa's Standard Bank Weighing Central Bank Guidance On Dividends

South African Reserve Bank's Prudential Authority advised lenders on Monday not to pay dividends or bonuses due to the crisis, joining the Bank of England, European Central Bank.

Photo Credit :

1586251273_Mjib7C_2020_04_07T064310Z_1_LYNXMPEG360FO_RTROPTP_4_HEALTH_CORONAVIRUS_STANDARD_BANK.JPG

Africa's biggest lender by assets Standard Bank said on Tuesday it would consider guidance from South Africa's central bank asking lenders not to pay dividends in 2020 as the coronavirus outbreak disrupts economies around the world.

The South African Reserve Bank's Prudential Authority advised lenders on Monday not to pay dividends or bonuses due to the crisis, joining the Bank of England, European Central Bank and others in asking banks to skip shareholder returns.

Standard Bank, which last week told investors it had not had any guidance from the central bank that such a move was imminent, said it would consider the request and advise shareholders in due course.

"The board fully recognises the importance of dividends to the group's owners," the bank said in a statement. "However, it also recognises the need to support households and businesses amid the COVID-19 pandemic and the importance of ensuring the stability of the group in the short, medium and long term."

The bank added that it remained well capitalised and liquid.

Banks pay dividends to reward shareholders and dispose of excess profits but can opt to retain these to bolster capital.

Scrapping dividends means banks can use this capital to lend to consumers and businesses instead.

(Reuters)


Tags assigned to this article:
south africa COVID-19 bank of england standard bank