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First Big European Bank To Announce 2019 Dividends Is UBS


11/19/2020


First Big European Bank To Announce 2019 Dividends Is UBS
The first major European bank that has paid the full dividend for last year despite the upheaval to economics and businesses cause by the novel coronavirus pandemic was UBS. On Thursday, shareholders of the lender   approved payment of dividend of the second half of its 2019.
 
A decision to postpone payment of part of its 2019 dividend was announced back in April by UBS as well as its rival Swiss bank Credit Suisse after there was increased pressure form banking regulators on the lenders about the banks paying out dividends even during the dire economic period state because of the pandemic.
 
In March and April, when the uncertainty and the economic turmoil over the Covid-19 pandemic was at its peak, lenders across the United Kingdom and the euro zone were announcement postponement of them paying out the shareholders dividends for 2019. On the other hand a milder approach was adopted by the Swiss financial market supervisor FINMA as it did not directly prevent the banks from making payments ot shareholders but warned the banks about not paying any dividends from 2019 to shareholders and instead advising them to hold that cash as conserved capital.  
 
Since then however, the economic hit of the pandemic has been well weathered out all of the major Swiss banks because of their strong capital positions.
 
In a virtual extraordinary general meeting, an agreement for the payout of a special dividend of $0.365 per share was arrived at about 99.49 per cent of the shareholders of UBS on Thursday. That amount was the same as the initial payment made to the lender’s shareholders back in May.
 
Its extraordinary general meeting would be held by Credit Suisse on November 27 where in the bank will request the shareholders to approve the second tranche of its 2019 dividend payment.
 
UBS said that in order to meet the requirement for cash for [paying shareholders next year, a sum of about $2.5 billion has been set aside by it. The bank also said that it had also decided to rebalance the amount of pay outs earmarked for buybacks to favour these over dividends at the insistence of the FINMA.
 
This approach gave the bank greater flexibility in the current uncertain economic environment, said the lender’s former CEO Sergio Ermotti.
 
(Source:www.livemint.com)


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