Most of the nation’s biggest banks have collectively announced they are all suspending dividend payments to investors.
The move comes as the global health crisis sparked by the coronavirus brings the world to a standstill.
Big banks act on PRA request
Barclays, Lloyds, HSBC, Santander and RBS all issued separate statements via the London Stock Exchange announcing the plan.
The boards of the banks said they had received from the Bank of England through the Prudential Regulation Authority a written request not to pay further dividends.
Impact on global economy
“The Board recognises the current and potential material impact on the global economy as a result of the coronavirus pandemic and the important role that HSBC has in helping its customers to manage through the crisis and to have resources to invest when recovery occurs” HSBC said in its stock market statement.
“HSBC has a strong capital, funding and liquidity position; however, there are significant uncertainties in assessing the time period of the pandemic and its impact.”
All the UK’s leading banks, which have their shares listed on the London Stock Exchange, have agreed to suspend future dividend payments with immediate effect. Notices like this often inspire shifts in the market, with some going to https://www.stocktrades.ca and the like to buy stocks there to use the money that would have gone into these dividends.
Lloyds was among the group to add that it would re-assess its dividend policy at the end of the year, a small sign of optimism in what can otherwise be seen as something of a downcast news day for the stock exchange.
The move has dragged down banking shares, with HSBC more than 9% lower, Barclays down 5%, and other banks seeing similar falls. Time will tell if this stabalizes.