The war in Ukraine is a "shock" which European banks are resisting well. For this reason, no stop to dividend payments of banks will be imposed by ECB supervision. This was assured by the president Andrea Enria, speaking at the European Financials Conference of Morgan Stanley. “I want to be very clear. I'm not and I don't think there will be similar interventions on the table to the recommendation to suspend the disbursement of dividends that came to the banks at the beginning of the Covid crisis,” said Enria. All this despite the forecasts for the near future are not the best. Indeed, the escalation of international sanctions and the Russian response will trigger a "temporary slowdown in growth of the eurozone”, predicts the head of banking supervision.
European banks: exposure to Russia is manageable
Eurozone banks “so far are resilient to the second exogenous shock” represented by the Russian invasion of Ukraine, after the one due to the Covid-19 pandemic, said the president of the ECB, underlining that exhibitions of European institutes to Russia they "seem manageable" even in extreme scenarios of abandonment of the country thanks to the capital solidity of the banks. Instead, the capital invested in the local subsidiaries appears to be at risk.
In recent days, the topic has also been the center of attention in Italy due to relations with Russia two main banks in our country. Twenty-four hours ago, Intesa Sanpaolo provided the details, revealing that its exposure to Russia and Ukraine amounts to €5,1 billion. Unicredit, which has an exposure of more than 7 billion, has made it known that it is considering leaving the country.
Bank dividends, no stop this time: that's why
Banks will be able to pay dividends to shareholders. This time, despite the difficulties, it will not arrive no imposition from above. According to the head of European banking supervision, it would be wrong "to rely on the stop of payments as if it were an ordinary supervisory tool". It's not at all, it is an extraordinary measure which it would be better not to repeat. “I would have preferred not to make this recommendation two years ago – added Enria -. We went to the banks and asked them to hold payments for 8 months, but they said it was not possible and they would only do it if we recommended it. So we recommended it and in that situation I would do it again,” she reiterated, recalling the "unprecedented" storm which had affected the European economy.
"In any case - he concluded - I hope that next time the banks will listen to us more and will take initiatives of this type of their own volition, such as suspending payments out of prudence".
Bank dividends: attention to capital
The distribution of capital to shareholders by banks must be linked “to solid capital plans built on credible scenarios and also on specific adverse scenarios for the single institution”, explained Enria, recalling that banks should avoid presenting their distribution policies in terms of absolute amounts and clarify in any case that these policies are subject to the achievement of plan targets.
Enria finally clarified that the ECB has no preference between dividends and buybacks and is not against the distribution of excess capital, provided that again it is in line with capital plans and is clearly distinguished from ordinary payments.
Bank dividends: we start in April
The 2022 dividend season will kick off on April 19 with some of the main banks of the Ftse Mib which will detach the coupon. Among the banks listed on the main list of Piazza Affari, the first to start will be:
- Banco Bpm: dividend of 0,19 euro,
- Banca Mediolanum: balance of 0,23 euros,
- Unicredit: dividend of 0,538 euro.
The other major banks, including Intesa Sanpaolo, will detach the coupon at the end of May. The dish promises to be very rich this year. Indeed, for this year, the banking institutions predict the distribution of 50% of the profits ggenerated in 2021, 15% more than last year.
