UK’s biggest banks face pressure to axe dividends to help businesses during coronavirus crisis

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UK’s biggest banks face pressure to axe dividends to ensure they can help struggling businesses weather the coronavirus crisis

  • Barclays, HSBC, Lloyds, RBS and Standard Chartered are due to pay out £15.3bn
  • Half of that money is due to investors in the coming weeks 
  • But they are facing calls to cancel or delay payouts so they can help business weather the pandemic
  • Coronavirus symptoms: what are they and should you see a doctor?

By Camilla Canocchi for Thisismoney.co.uk

Published: | Updated:

The UK’s biggest banks are facing pressure to cancel or delay big dividend payouts to investors to make sure they have the resources to keep struggling business afloat during the coronavirus crisis.

Britain’s biggest banks – Barclays, HSBC, Lloyds, RBS and Standard Chartered – are due to pay out £15.3billion in dividends, a figure which exceeds the amount paid in 2007, just before the financial crisis, according to research by investment platform AJ Bell.

Half of that money is due to be paid out to investors in the coming weeks – but both small shareholders and big City investors face disappointment.

Britain’s biggest banks – Barclays, HSBC, Lloyds, RBS and Standard Chartered – are due to pay out £15.3billion in dividends, half of which in the coming weeks

With the coronavirus pandemic wreaking havoc among UK businesses, lenderrs are under pressure to axe payouts – and executive bonuses – so they have the money to help businesses.

‘Politically the plan is an easy sell since the dividend cancellation and debt forbearance plans could be pitched as the banks returning the favour that the public did for them with the bail-outs that came after the Great Financial Crisis (even if it must be said that neither Barclays nor HSBC nor Standard Chartered actually accepted any bail-out cash in 2008-09),’ said Kevin Doran of AJ Bell.

Barclays is understood to be keen to pay its dividend, which is for the second half of 2019, later this week and review any future payouts when they come up.

The Bank of England has not blocked payouts, but is facing pressure to do so.

The world’s ‘bank for central banks’, the Bank for International Settlements, yesterday called for a ‘global freeze’ on bank dividend payouts.

However, should such a move be implemented by the Bank of England it would likely prompt shareholder fury given that banking executives have been issued with bonuses in recent weeks.

Many other companies are slashing dividend to preserve cash to prevent going bust as the coronavirus crisis takes hold.  

 

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