MNB instructs lenders not to pay dividend till end of 2021
Image by posztos / Shutterstock.com
The National Bank of Hungary (MNB) said on Thursday that it issued an executive circular to lenders instructing them not to pay dividends or take on irrevocable dividend payment obligations until December 31, 2021, according to a report by state news wire MTI.
The financial institutions concerned may be exempted from the restriction only under strict conditions. They have the opportunity to pay dividends if their post-payment Tier 1 capital adequacy ratio decreases only minimally, their capital buffer remains at the expected high level, they do not have an impairment deficit and their business prospects are adequate based on the information submitted to MNB.
Lenders have also been instructed to refrain from repurchasing shares for the purpose of remunerating shareholders and they should consider limiting payments for performance-based remuneration to persons covered by their remuneration policy until the end of the year.
MNB said it made its decisions because the blanket loan repayment moratorium, introduced in the spring of 2020 to ease the economic fallout from the coronavirus crisis, has been extended till the end of September 2021 and there is a possibility that it will be extended further.
Earlier the central bank had told lenders to suspend dividend payments until January 1, 2021, which was then extended to September 30, 2021.
Avg Hourly Pay Rate for Blue-collar Workers Climbs 16% in Q1
Bulgaria's Household Income, Spending Rise 20% in 2023
Job Fair and Career Prep at Corvinus Starts Tomorrow
Spago Budapest Offering Unique Sunday Brunch Experience
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
