FILE PHOTO: The Bank of England, London, Britain, April 14, 2020. REUTERS/John Sibley/File PhotoLONDON (Reuters) – The Bank of England will assess whether or not to increase a suspension on payouts reminiscent of dividends and share buybacks by banks past the top of the 12 months because of the COVID-19 pandemic, it mentioned on Tuesday. Below stress from the central bank, Britain’s lenders agreed in March to droop payouts this 12 months to be able to protect capital to assist firms and households hit by COVID-19 lockdowns. Bonuses to senior workers had been additionally scrapped. The Bank of England (BoE) mentioned on Tuesday its Prudential Regulation Authority (PRA) would undertake within the fourth quarter an evaluation of distribution plans at banks past the top of 2020. “The assessment will be based on the current and projected capital positions of the banks and will take into account the level of uncertainty about the future path of the economy, market conditions and capital trajectories prevailing at that time,” the BoE mentioned in an announcement. Britain’s lenders are as a consequence of publish second quarter earnings which are anticipated to point out extra hefty provisions for loans hit by fallout from the pandemic. The BoE mentioned payouts had been an essential and mandatory a part of the functioning of the banking system, however that suspending them was a “sensible precautionary step given the unique role of banks in supporting the wider economy through the period of economic disruption”. Individually on Tuesday, the European Central Bank mentioned it had prolonged till January 2021 its advice to euro zone lenders to not pay dividends. The BoE mentioned it famous the ECB’s announcement. Reporting by Huw Jones; Modifying by Mark PotterOur Requirements:The Thomson Reuters Belief Rules.
