The stop established by the ECB on bank dividends in 2020 and the limitations imposed on coupons until October 2021 have not only affected the portfolios of investors, but have also inflicted a hard blow to foundations of banking origin. In fact, due to these decisions, the proceeds fell by more than 45%, while the assets decreased by more than 500 million. This was revealed by the 26th annual report, approved today by the council of Acres, which provides a snapshot of data from the 2020 financial statements of banking foundations.
According to the report by Acri, the association of foundations, in 2020 the total accounting assets fell to 39,7 billion euros, down by around 553 million euros (-1,4%), while the active it stood at just over 46 billion euro, a slight decrease (-1,8%) compared to the previous year.
In parallel in the 2020 financial year the proceeds fell to 1,421 billion euros, down by 45,3% compared to 2,6 billion in 2019. The drop was caused by “the effects of the pandemic crisis which, among other things, induced the European Central Bank to recommend to all credit institutions not to proceed with the dividend payment", explain the Foundations. The report also underlines that, from an examination of the types of revenue, it emerges that last year dividends from non-bank holdings, equal to 900 million, represented the main form of income, with an incidence of 63,3% on total.
Despite the almost halving of the proceeds, precisely in order to deal with the economic consequences of the Covid emergency, the institutions have increased disbursements, which rose from 910,6 million in 2019 to 949,9 million euros in 2020 (+4,3%). To take the lion's share is still the welfare to which 396,5 million were allocated (41,7% of the total). The disbursement rate on the average assets of all the Foundations it is therefore 2,4%.
Going forward with the parameters, the gross profitability of assets stood at 3,6%, compared to 6,5% in 2019, while the operating surplus amounted to 1,05 billion (-45%).
"The Twenty-sixth Annual Report of Foundations of banking origin records the impact that the first year of the pandemic has had on the system of Foundations and the extraordinary response that they have been able to put in place to respond to the emergency", he said Francesco Profumo, president of Acri. “First of all, the prudent management and the diversification process, constantly pursued over the years by the Foundations, has ensured that, despite the crisis on the financial markets and the freeze on the distribution of dividends wanted by the ECB, disbursements not only have resentful, but have also grown. Just when they were most needed, the Foundations proved to be there. Furthermore, the decline in profitability recorded by Foundations in 2020 was decidedly less than that of other institutional investors in the same period. It is useful to consider, however, that the dividends not received during 2020 have further strengthened the credit institutions and therefore, in the long term, consolidated the value of the investment”, concludes Profumo.
