The Bank of England has further relaxed dividend restrictions for British banks. This was announced by the central bank on Tuesday.
BoE believes that British banks are well capitalised and resilient to survive the current period and to continue to support the economy in recovering from the impact of the coronavirus crisis. While many uncertainties remain, according to the central bank, the degree of uncertainty has decreased significantly compared to December 2020, when the distribution of dividends by the largest UK banks was already somewhat relaxed but still limited to a maximum of 25 percent of profits. An interim dividend could be granted in 2021 but not yet paid.
Today, Bank of England concluded that these restrictions could be lifted and that banks would be given more freedom to pay dividends. However, the central bank warns that banks should remain cautious and a dividend payment should be “appropriate”.