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PRA issues statement on dividend payments and share buybacks beyond 2020

The PRA has issued a statement confirming that it will undertake its assessment of firms’ distribution plans beyond the end of 2020, in Q4 2020. 

By way of background, in its statement on 31 March, the PRA welcomed the decisions of the large UK banks to suspend dividends and buybacks on ordinary shares until the end of 2020, and set out its expectations that banks would not pay cash bonuses to senior staff. These decisions were, the PRA says, an important precautionary step given the role of banks in supporting the wider economy through the period of economic disruption.

The PRA says its assessment will be based on the banks’ current and projected capital positions, taking into account the level of uncertainty on the future of the economy, market conditions, and capital trajectories prevailing at that time.

 

Amelia Green