Views Article – Sharenet Wealth

Australasia, News

Reserve Bank Of New Zealand Eases Some Dividend Restrictions & Expects Banks To Be Prudent

March 31 (Reuters) – Reserve Bank of New Zealand:

* RETAINS SOME DIVIDEND RESTRICTIONS AND EXPECTS BANKS TO BE PRUDENT

* CHANGES WILL ALLOW BANKS TO PAY UP TO A MAXIMUM OF 50% OF THEIR EARNINGS AS DIVIDENDS TO THEIR SHAREHOLDERS

* 50% DIVIDEND RESTRICTION WILL REMAIN IN PLACE UNTIL 1 JULY 2022

* NEW ZEALAND ECONOMY HAS REBOUNDED TO A STRONGER POSITION THAN ANTICIPATED AT THE OUTSET OF THE COVID-19 PANDEMIC

* AS SUCH, THE COMPLETE RESTRICTION ON DIVIDENDS IS NO LONGER NEEDED

* GIVEN UNCERTAINTIES AHEAD, IT IS APPROPRIATE TO RETAIN SOME RESTRICTIONS ON THE DIVIDENDS THAT BANKS CAN PAY

* INTENDS TO NORMALISE THE DIVIDEND SETTINGS BY REMOVING THE RESTRICTIONS ENTIRELY AFTER 1 JULY 2022

* WRITING TO THE COUNTRY’S REGISTERED TRADING BANKS TO ADVISE THEM OF DECISION

* AS ECONOMIC CONDITIONS IMPROVE, BUILDING STRONG CAPITAL BUFFERS NEEDS TO BE PRIORITISED

* BANKS’ DECISIONS ON DIVIDENDS SHOULD TAKE INTO ACCOUNT REQUIREMENT TO MEET HIGHER CAPITAL REQUIREMENTS FROM RESERVE BANK’S CAPITAL REVIEW Source text https://bit.ly/3uljmlZ Further company coverage:


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