(Adds more detail)
By Huw Jones
LONDON, Dec 10 (Reuters) - Britain's banks can resume paying
some dividends and bonuses as they appear well capitalised and
resilient to any further fallout from the coronavirus pandemic,
the Bank of England said on Thursday
The BoE told Britain's seven biggest lenders in March to
suspend dividends and share buy-backs until the end of 2020, and
to cancel payments of any outstanding 2019 dividends.
It also expected banks and building societies to scrap cash
bonuses for senior staff to help maintain capital buffers and
continue lending to companies and households going into economic
lockdown to fight the pandemic.
On Thursday the BoE said the time had come to relax this
advice for lenders including HSBC, Barclays,
Lloyds and NatWest.
"The Prudential Regulation Authority judges that an
extension of the exceptional and precautionary action taken in
March is not necessary and that there is scope for banks to
recommence some distributions should their boards choose to do
so," the BoE said in a statement.
Any distributions for this year should be "prudent" and fall
within temporary "guardrails" published by the BoE on Thursday.
"In the meantime, for 2021 dividends the PRA is content for
appropriately prudent dividends to be accrued but not paid out
and aims to provide a further update ahead of the 2021 half-year
results of large UK banks," it said.
Under the guardrail, dividends should not exceed 0.2% of a
bank's risk-weighted assets at the end of 2020, or 25% of
cumulative profits over 2019 and 2020, after deducting prior
shareholder distributions over that period.
(Additonal reporting by Andy Bruce, editing by David Milliken)