FILE PHOTO: People queue at Barclays Bank in St Albans, as the spread of the coronavirus disease (COVID-19) continues, in St Albans, Britain, March 23, 2020. REUTERS/Paul Childs/File Photo

LONDON (Reuters) – Barclays (BARC.L), Royal Bank of Scotland (RBS.L) and the British arm of Spain’s Santander (SAN.MC), said on Tuesday they would suspend dividend payments, saving their capital as a buffer against expected losses from the economic fallout from the coronavirus.

Barclays and RBS said they would not pay any 2020 dividend and also scrapped planned 2019 payouts in response to a request from the Prudential Regulatory Authority.

“The bank has a strong capital base, but we think it is right and prudent, for the many businesses and people that we support, to take these steps now,” Barclays chairman Nigel Higgins said.

More of Britain’s top lenders were expected to follow suit on Tuesday evening following the request from the regulator.

Banks pay out dividends as a means of rewarding shareholders and disposing of excess profits, but they have the option to retain the earnings instead to preserve their capital levels.

The statements from British lenders come after the European Central Bank (ECB) last week asked euro zone lenders to skip dividend payments and share buybacks until October at the earliest, and use their profits to support the economy.

Several of Europe’s largest lenders, including UniCredit (CRDI.MI), and Societe Generale (SOGN.PA) have already announced they will hold off paying 2019 dividends for now.

However there are some hold outs. Swiss banking giants UBS (UBSG.S) and Credit Suisse (CSGN.S) have both said they still plan to press ahead with 2019 dividends despite their home regulator urging caution over payouts.

Reporting By Lawrence White and Iain Withers, Editing by Rachel Armstrong

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