EBF letter to ECB/SSM in context of actions to fight Covid-19 pandemic

EBF HOLDING STATEMENT – 27 MARCH 2020:

EBF letter to ECB/SSM in context of actions to fight Covid-19 pandemic

The European Banking Federation confirms that it has written to the Chairman of the Supervisory Board of the European Central Bank regarding bank sector initiatives designed to contribute to the success of the far-reaching policy actions that are being implemented across Europe to alleviate the economic impact of the Covid-19 pandemic.

The letter includes the following points:

• The European banking sector remains fully committed to helping businesses and households navigate the unprecedented challenges posed by the global COVID-19 pandemic. All European financial institutions are considering the extreme uncertainty surrounding the Corona crisis impact on the economy and will prioritise solvency in order to be able to fund the economy.
• It is the strong view of the European Banking Federation that any decisions by a listed bank to withhold its 2019 dividends at this stage needs to take into account the perception of investors about the solvency of the European banking sector and the expectations of shareholders.
• For 2020 the EBF believes that listed banks should not accrue dividends or undertake share buybacks so as to maintain maximum capital preservation and bank Boards will be deciding on dividend policy and any distribution amounts at year-end.
• Where 2019 dividend distributions and share buybacks have not yet been voted by shareholders, some banks could decide, because of national specificities or individual choice, that part or the full amount be assigned to reserves, until there is better visibility as to the effects of the crisis, at which point they could be distributed to shareholders.

EBF MEDIA CONTACT:
Raymond Frenken, Director of Communications
+32 496 52 59 47
r.frenken@ebf.eu