Mr Charlie Nunn - where's my divi?23 Aug 2021 12:36
Reply from the PRA - 26-7-21 -
Thank you for your email.
As you are aware, at the end of March 2020, the Prudential Regulation Authority (PRA) welcomed the decisions of the boards of the large UK banks to suspend dividends and buybacks on ordinary shares until the end of 2020. At the 'PRA’s REQUEST' they also cancelled payments of any outstanding 2019 dividends and restricted cash bonus payments to senior staff.
This exceptional request reflected the unprecedented levels of economic uncertainty facing the global economy at that time due to the onset of the Covid-19 pandemic.
These actions did not reflect a permanent change in banks’ capital requirements, the capital retained would be available either to support lending, absorb future losses or BE DISTRIBUTED to shareholders.
In the PRA’s update on shareholder distributions by large UK banks published on 13 July the PRA concluded that the extraordinary guardrails within which it asked bank boards to determine the appropriate level of distributions in relation to full-year 2020 results are no longer necessary and have been removed with immediate effect.
This is consistent with the PRA’s intention, as set out in its 10 December 2020 statement, to transition back to its standard approach to capital-setting and shareholder distributions through 2021. Under this framework, BANK BOARDS are responsible for making distribution decisions subject to the standard constraints of the regulatory framework, including the regular annual stress test. As such, IT IS FOR BANKS TO DECIDE on the appropriate level of future dividends within the regulatory framework.
Kind regards,
Bank of England|Threadneedle St|London EC2R 8AH|
To Summarise
* 'PRA’s REQUEST' to withhold 2019 divi
* PRA dodge responsibility re return of withheld divi
* Bank boards are free to return the withheld divi
Mr Charlie Nunn - with respect - where's my divi?
Sign In
Follow the stocks
