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In RBS's case, Dividends are a somewhat recent phenomenon after the debacle of 2008 when, in truth, it should have been broken up. So I accept that although it was not RBS' decision to cancel, the levels of Dividend being paid were always susceptible to reduction, albeit outright cancellation was not on anyone's radar.
For those who are recent investors here, be they looking for a quick profit on assumption the current SP simply HAS to recover or, those who are simply hoping to see a longer term recovery in its SP should, IMO, reflect on the single fact that Banks' profits/performances are inherently cyclical by nature and whether you should be investing in them ahead of what is likely to be a record breaking recession for the UK (if not Global) economy, is a question many should be asking themselves, again, very much IMO.
I hope those who have bought in, know what to expect in a Bank when a full blown recession hits......and it will.
B
Noel Quinn, pictured, sent a letter to each of the bank’s shareholders in Hong Kong on Friday. Photo: AFPNoel Quinn, pictured, sent a letter to each of the bank’s shareholders in Hong Kong on Friday. Photo: AFP
Noel Quinn, pictured, sent a letter to each of the bank’s shareholders in Hong Kong on Friday. Photo: AFP
HSBC chief executive Noel Quinn sent a letter to each of the bank’s shareholders in Hong Kong on Friday to explain the lender’s decision to cancel its dividend this week and reassure investors of its strong capital position.
The unusual step of writing directly to the bank’s shareholder base in the city came after a torrid three-day stretch that saw about US$15 billion shaved off the company’s market capitalisation after the bank cancelled its final interim dividend for 2019 and said it would not pay a dividend for at least the first three quarters of the year.
HSBC was one of seven banks and building societies based in the United Kingdom that agreed to cancel their dividends early on Wednesday and not to undertake any share buy-backs this year after a request from the Prudential Regulation Authority, a regulatory arm of the Bank of England.
Calling it a “sensible precautionary step”, the watchdog asked HSBC and the other banks to take the step on Tuesday night London time to ensure they would be able to continue to support the wider economy in light of the coronavirus pandemic, which has infected more than 1 million people worldwide and probably sent the global economy into a recession.
“We profoundly regret the impact this will have on you, your families and your businesses,” Quinn said in the one-page letter, which will also be posted on the bank’s investor website. “We are acutely aware of how important the dividend is to our shareholders in Hong Kong. We deeply value your support as a shareholder and we never take that for granted.”
Business / Banking & Finance
HSBC boss Noel Quinn writes letter to reassure Hong Kong shareholders after sharp three-day drop in stock price
HSBC cancelled its dividend, suspended buy-backs on Wednesday after request from UK regulator
https://www.scmp.com/business/banking-finance/article/3078394/hsbc-boss-noel-quinn-writes-letter-reassure-hong-kong