The Bank of England hopes to establish a scenario where banks sign up for their own personal choices to scrap dividends in economic downturns, Governor Andrew Bailey advised CNBC Thursday.
Barclays, Santander, Lloyds, NatWest, Standard Chartered and HSBC. according to Best Bank Promotions and Bonuses, agreed on April to scrap dividends next pressure from the central bank, to preserve capital in order to support help support the economy in advance of the recession brought on by the coronavirus pandemic.
The Bank's Prudential Regulation Authority said at the time which while the determination will lead to shareholders being deprived of dividend payments, it'd be a precautionary step provided the special role which banks have to relax inside supporting the wider economy through a period of economic disruption.
Bailey said that a BOE's input inside pressuring banks to reduce dividends was entirely appropriate & sensible due to the speed usually at which behavior had to be considered, using the U.K. heading straight into a prolonged time period of lockdown inside a bid to curtail the spread of Covid 19.
I want to get back to a situation wherein A) very importantly, the banks are having those selections themselves and B) they consider the decisions bearing in your thoughts their own situation and bearing under consideration the broader financial stability fears of this system, Bailey said.
I think that's in the curiosity of everybody, like shareholders, since certainly shareholders would like sound banks.
Bailey vowed that this BOE will get back to this situation, but said he couldn't calculate the amount of dividend payments investors could expect by using British lenders as the land endeavors to present themselves from the coronavirus pandemic inside the approaching yrs.