RE: Facts v Fears4 Jan 2021 18:41
Seems this Finnish bank wanted to reward investors regardless and the authorities have no authority. The SP surged as much as 20%, and traded 10% higher, can't see it happening here somehow.
Finland’s financial watchdog is trying to figure out how to respond after a lender it oversees explicitly disregarded the European Central Bank’s guidelines on shareholder rewards.
The decision by Alandsbanken Abp, announced on Jan. 1, to pay almost four times the dividend cap set by the ECB is “unfortunate,” Jyri Helenius, head of banking supervision at the Finnish Financial Supervisory Authority, said in an interview. The lender acted without its watchdog’s permission, but Helenius acknowledged there’s not much he can do about it.
“We expect banks to comply with the recommendation, even though we aren’t able to make it legally binding,” Helenius said. “It’s unfortunate that a Finnish bank is slipping from the common European front on this.”
Last month, the ECB lifted a de facto ban on dividends but urged banks to limit such shareholder payouts to less than 15% of profit for 2019 and 2020, or 0.2% of their key capital ratio, whichever is lower. Alandsbanken says it plans to pay out 59% of 2019’s earnings, citing record profits that year.
The lender’s Class A stock, adjusted for being ex-dividend today, surged as much as 20%, and traded 10% higher at 23.80 euros as of 11:14 a.m. Helsinki time.
The cap on bank dividends in the euro zone is stricter than in the U.K. and Switzerland and has prompted criticism from some corners of the financial industry. ?