One after the other, European banks line up ECB recommendation e suspend dividends and buybacks, setting aside liquidity to support businesses and households called to face the deep economic crisis caused by the coronavirus pandemic. Announcements welcomed by Andrea Enrico, chairman of the Supervisory Board of the ECB: "I am very pleased to see that the banks are reacting very positively, they are responsible," said Enria.
In Italy, after the official communications from Unicredit, Banca Generali and Banca Mediolanum, today attention has turned towards Intesa Sanpaolo, Banco Bpm and Ubi Banca who communicated to the market the suspension of dividends, however leaving a small window open for the future. The same decision also by Banca IFIS, while the choice of Bper is awaited, which has convened the board of directors.
THE STOP OF INTESA SANPAOLO
The queen of dividends has made it known that it has suspended the proposed distribution of the coupon equal to 19,2 cents per share, 3,4 billion euros overall. The profit for the 2019 financial year will be allocated to reserves, thus going to strengthen the capital which will exceed the requirement set by the ECB by over 16,5 billion euros. However, the last word has not been said. The bank led by Carlo Messina will await the next indications from the ECB and after 1 October - the date until which the banks will not have to detach the coupons according to the indications of the ECB - will convene a new meeting to “execute the distribution of part of the reserves to shareholders by the end of the 2020 financial year”.
"In this phase of exceptional emergency that our country and the whole world are facing, we have decided to collect the indications from the supervisory authorities", commented the CEO, however, who has no intention of taking steps back on the public offer on Ubi Banca. On the contrary, Messina says he is convinced of the fact that "the operation, in this extraordinary phase, takes on even greater strategic value and represents an even more relevant perspective for Ubi Banca: high capitalisation, robust coverage of non-performing loans, size, diversification and investments are now more valuable than in normal times. The creation of a bank capable of generating further benefits for all stakeholders and of representing solid support to the real and social economy represents an overall strengthening of the country”, concluded the manager.
On the Stock Exchange, the decision to suspend the dividend was paid dearly by Intesa (as with all other banks). The shareholders certainly understood, but they didn't like it. After the -6,12% recorded in the session of 30 March, on March 31, the stock rebounded, gaining 1,2%.
BANCO BPM AND UBI BANCA
Having taken note of the recommendations received from the European Central Bank and the Bank of Italy (for the banks under its direct control) Bank Bpm (-1%) "ordered that the shareholders' meeting of Banco Bpm convened for Saturday 4 April 2020 will not give rise to the discussion and voting of point 2 of the agenda (resolutions on the allocation and distribution of profits) of the ordinary part of the assembly". Translated: dividend suspended until October, after which it will be evaluated on the basis of economic conditions and indications from the ECB. The 2019 profit, equal to 837 million euros, will be "held in the bank's equity" as a reserve available for distribution. The non-deduction of dividends from Cet1 capital will also have a positive impact of 20 basis points on the ratio.
The communication of also arrived shortly Where's Banca (+0,9%). The board of directors will not submit to the shareholders' meeting on 8 April the proposal to distribute the dividend, the amount of which was set at 13 cents per share, for a total of 147,6 million euros which at this point will be used to boost the heritage. If the ECB does not provide different indications, another Assembly will be convened after 1 October to decide on the possible coupon.
"It is the first time in Ubi's over XNUMX-year history that dividend payments have been suspended", comments the bank in a note, recalling how even in the years of the "worst crisis" Ubi has always paid its shareholders a coupon in cash.
UNICREDIT, BANCA GENERALI, BANCA MEDIOLANUM
Unicredit was the first Italian bank to move. On the evening of Sunday 29 March, before the opening of the markets, the institute led by Jean Pierre Mustier announced that it had postponed the resolutions on the dividend of 63 cents per share and on the repurchase of treasury shares of 463 million. However, the group has decided to offer shareholder Foundations interest-free loans up to a value equal to the amount of the dividends. "As president of the Ebf (European Banking Federation, ed.) I share the ECB's decision on dividends", commented Mustier in an interview with Bloomberg TV. Even in the case of Unicredit, sales on the Stock Exchange were copious: -7,4% on March 30th, -1,7% on March 31st. Meanwhile, Unicredit's top management has decided to waive the entire bonus for 2020: the amount will be "donated to the UniCredit Foundation to support social initiatives", reads a note.
On April 1, the communication of IFIS Bank, which like the others, has established the postponement of the distribution of dividends for the 2019 financial year at least until 1 October 2020.
Turning to asset management, Banca Mediolanum (-1,5% on the Ftse Mib) postponed the coupon by 55 cents per share (but 21 cents has already been paid down payment in November, so the postponement only applies to the remaining 34 cents). However, the group led by Massimo Doris said he was confident "of being able to follow up on the dividend distribution proposal as soon as conditions permit, in accordance with what was communicated by the Bank of Italy itself".
Same line for Banca Generali which postponed the proposed distribution of the dividend on 2019 profits. The coupon, already approved by the board of directors, is equal to 1,85 euros per share (216 million euros in total) and will be distributed "as soon as the conditions are met, after the moment of emergency". The institution led by Gian Maria Mossa, after the fall on the eve, in the session of 31 March recovered part of the losses, rising by 2,4%.
THE EUROPEAN BANKS
As regards the other European banks, the Dutch institutes Abn Amro and Ing announced the halt to dividends. Referral also for the Belgian Kbc and for the Irish Bank of Ireland and Allied Irish Bank.
In Germany the chairman of the management board of Commerzbank he announced: "It is reasonable to follow the ECB's recommendation and suspend the payment of dividends for the time being". The German institute will not plan to pay a coupon on 2020 until the uncertainties caused by the emergency are concluded.
In Spain Banco Santander he had already announced the stop before the ECB recommended doing so, while waiting is growing for any communications from French institutions, in particular from Bnp Paribas which has promised shareholders a total coupon of 3,9 billion euros.
The only bank so far to move against the trend is Switzerland ubs which, despite the recommendations of the Finma (the Swiss market authority) has decided to confirm the dividend.
(Last update: 16.45 pm on 1st April).
