Banks bow to pressure and axe shareholder payments

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Some of the United Kingdom’s greatest banks have agreed to scrap dividend payments and hang onto the money, that could be wanted all the way through the coronavirus disaster.

The Bank of England welcomed the verdict to droop the payments to shareholders and instructed the banks now not to pay bonuses to senior team of workers both.

The banks, which come with NatWest, Santander and Barclays, have been due to pay out billions to shareholders.

But in fresh days they have got come below pressure to hang onto the cash.

The deputy governor of the Bank of England, Sam Woods, wrote to some banking bosses asking them to droop dividend payments. He requested them to verify their choice by means of Tuesday night time.

In a observation, the Prudential Regulation Authority, which is a part of the Bank of England, mentioned: “Although the choices taken nowadays will lead to shareholders now not receiving dividends, they’re a smart precautionary step given the original position that banks want to play in supporting the broader economic system via a length of monetary disruption.

Between them, Lloyds, Royal Bank of Scotland, Barclays, HSBC and Standard Chartered, have been anticipated to pay a complete of £15.6bn to shareholders, in accordance to research from funding company AJ Bell.

But they are going to now retain the ones finances, which the Bank of England mentioned “must assist the banks improve the economic system via 2020”.

However, the Bank mentioned it didn’t be expecting the cash to be wanted, noting that the banks had greater than sufficient cash in reserve to handle each an international recession and a surprise within the monetary markets.