European banks dividends

European banks

Ban On Bank Dividends: A Strange Remedy With Severe Side Effects

Scander Bentchikou (Lazard Frères Gestion) | The restrictions on bank dividends, which have been in force since March 2020, ended on Friday. For banks and their shareholders, this is a relief. The measure, supposed to protect banks from the crisis, has done more harm than good. Technically, the banking sector’s dividends made a big comeback in spring 2021. However, the amounts paid remained well below their 2019 levels, given the still numerous restrictions. The return to normal will have to wait for the results of the banking stress tests, published on 31 July by the European Banking Authority.

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European Banks’ Dividends Could Reach Up To €11 Bn, Says The ECB

European banks will pay out between €10.5 and 11 Bn in dividends this year, according to “very preliminary” estimates by the European Central Bank, following consultations with the lenders. Spanish Santander, BBVA, CaixaBank and Bankinter have been authorised by the ECB to distribute 15% of their profits in dividends to their shareholders. Sabadell will not remunerate its shareholders so it would not have requested authorisation, while Bankia will do so after merging with CaixaBank, in April or May.