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* Barclays and Citi warn of impact on profits, dividends
* Q2 earnings seen falling 21.9% - Refinitiv
* Euro zone manufacturing activity collapses
* UK banks scrap dividends for 2020, halt 2019 payouts
(Adds quotes, background)
By Julien Ponthus and Thyagaraju Adinarayan
LONDON, April 1 (Reuters) - Profits and dividends paid out
by European companies could halve this year due to the economic
fallout of the coronavirus outbreak, analysts estimate, similar
to the effects of the financial crisis in 2008.
Countries around the world are forcing people to stay at
home in an attempt to contain the fast-spreading coronavirus,
leading to businesses shutting down and grinding economic
activity to a halt.
Barclays and Citi were among the few banks so far to put an
estimate on the eventual impact, warning of a 40% to 50% hit to
profits and dividends.
"We expect the economic fallout from COVID-19 (coronavirus)
to be as severe as the 2008-09 recession, but briefer," said
Emmanuel Cau, Barclays European equity strategist.
Euro zone manufacturing activity collapsed last month as
breaks in global supply chains crushed output, and the nosedive
could worsen in coming months, a survey showed on Wednesday.
Companies listed on the pan-European STOXX 600 are
expected to report a 21.9% decline in earnings in the second
quarter, a deterioration in outlook from a drop of 14.9%
forecast the week before. For the third quarter, analysts see a
15.4% fall, according to Refinitiv consensus forecasts.
Those forecasts could worsen, as some analysts are finding
it difficult to make any prediction at this stage of the crisis.
Companies have been cutting or suspending dividends as their
cash flows dry up.
Investment firm AJ Bell last week estimated that over 100
British firms have postponed or cancelled some 4.2 billion
pounds ($5.2 billion) of dividend payments in March alone.
Britain's top banks halted dividend payments on Wednesday
after pressure from the regulator to save their capital as a
buffer against expected losses.
Barclays, HSBC, Lloyds, RBS
, Standard Chartered and the British arm of
Spain's Santander halted payouts for 2020 in a
co-ordinated industry response to a request from the Prudential
Regulatory Authority (PRA) on Tuesday.
The lenders were also asked to halt any payouts for 2019
that had not yet been paid. They were due to pay out over 8
billion pounds between them in 2019 dividends, with HSBC, the
biggest payer, due to hand out $4.2 billion.
($1 = 0.8095 pounds)
(Reporting by Julien Ponthus and Thyagaraju Adinarayan; Editing
by Maiya Keidan and Elaine Hardcastle)
