South African banking stocks fell 4% after SARB dividend advice

  • Published Month : Tuesday, 07 Apr 2020 05:00 pm

The Johannesburg Stock Exchange’s banking index fell 4.3% when the market opened but recovered slightly to stand 3.9% down at 0707 GMT, against a 1.9% rise for the market overall.

South African banking stocks opened more than 4% down on Tuesday after the central bank’s advice on Monday to refrain from dividend payouts as the country contends with the widespread economic damage inflicted by the coronavirus pandemic.

The South African Reserve Bank’s Prudential Authority advised lenders not to pay dividends or bonuses this year, joining the Bank of England, European Central Bank and others in asking banks to skip shareholder returns.

The Johannesburg Stock Exchange’s banking index fell 4.3% when the market opened but recovered slightly to stand 3.9% down at 0707 GMT, against a 1.9% rise for the market overall.

Standard Bank, Africa’s biggest lender by assets, was the first of South Africa’s leading lenders - which include FirstRand, Nedbank, Absa and Investec - to comment on the SARB announcement.

“The board fully recognises the importance of dividends to the group’s owners,” Standard Bank said in a statement. “However, it also recognises the need to support households and businesses amid the COVID-19 pandemic and the importance of ensuring the stability of the group in the short, medium and long term.”

The bank, which last week told investors that it had had no guidance from the SARB that such a move was imminent, added that it remained well capitalised.

Banks pay dividends from their profits to reward shareholders but can refrain from doing so to bolster capital, which can be used for consumer and business lending.

Read here

About The Insight Partners:

The Insight Partners is a one stop industry research provider of actionable intelligence. We help our clients in getting solutions to their research requirements through our syndicated and consulting research services. We specialize in industries such as Semiconductor and Electronics, Aerospace and Defense, Automotive and Transportation, Biotechnology, Healthcare IT, Manufacturing and Construction, Medical Device, Technology, Media and Telecommunications, Chemicals and Materials.

A PHP Error was encountered

Severity: Warning

Message: count(): Parameter must be an array or an object that implements Countable

Filename: amp/news_details_amp.php

Line Number: 252

Backtrace:

File: /home/smartmarketnews/public_html/application/views/amp/news_details_amp.php
Line: 252
Function: _error_handler

File: /home/smartmarketnews/public_html/application/controllers/Amp_controller.php
Line: 41
Function: view

File: /home/smartmarketnews/public_html/index.php
Line: 315
Function: require_once

Smarter Decisions with Smart News

Smart Market News is committed to getting its readers the latest updates and insights on industries that help in making “smarter” business decisions. With insights and inputs from corporate decision makers, we bring you the stories of adopting innovative solutions and strategies that have been changing the world. Our editorial insights on products, solutions, companies, and adoption of best practices not only help in understanding the markets better, but also prove to be a complete package for your information needs.

media@smartmarketnews.com | sales@smartmarketnews.com

Contact Us
Visit Our Sites
© The News and Media Division of The Insight Partners 2019 | All Rights Reserved | Privacy Policy