📰 EBF Morning Brief - Monday 30 March

FROM THE MEDIA

Banks follow ECB recommendation to halt 2019 dividends

Unicredit, ING, AIB, Santander, Bankia, ABN Amro, KBC and even Dutch cooperative Rabobank were among the EU banks on Monday that announced they will stop or postpone their dividend payouts, media report. Unicredit, Italy's largest bank by assets, was among the first to suspend dividend payments and stop buying back shares until 2023, reports La Stampa. The bank will also offer its shareholder foundations interest-free loans equal to the amount of the planned dividends. Irish lenders AIB, Bank of Ireland all withdrew their proposed shareholder dividends in line with recommendations from the ECB, says the Irish Times. Biggest Dutch bank ING has said this morning to suspend any payment of dividends until at least 1 October 2020, reports Reuters. In Belgium, KBC also will cancel its dividend payments and its planned share buyback, according to HLN. Santander, Bankia and CaixaBank lead the dividend cuts in Spain that also include a cap on executive remuneration, reports Cinco Dias. Swiss bank UBS is maintaining its previously announced dividend for 2019, ignoring guidance from Swiss regulator FINMA, says Reuters. In Germany, savings banks and cooperative banks are exempt from the measures due to their structure, reports Handelsblatt. La Stampa Irish Times Reuters HLN Cinco Dias Reuters II Handelsblatt

FT, FD: EU backs bank rule delay to spur crisis lending

Europe’s financial regulation chief, Valdis Dombrovskis has pledged to delay tough new capital rules for banks, saying that support for lending has to be the overwhelming priority in the fight against coronavirus, report the Dutch financial daily and the Financial Times. In the Dutch daily Dombrovskis underlined the need for European unity and solidarity at this challenging time. In EU talks on Friday the Netherlands refused to discuss using Coronanbonds as a possible option to overcome budget challenges across Europe. In remarks to the FT likely to be well received by Europe’s financial sector, Dombrovskis said now was not the time to push ahead with standards that would force banks to raise additional equity. He applauded moves by global regulators on Friday to defer the rollout of new capital standards by one year, confirming Brussels would make sure European banks could benefit. “It’s a welcome development because it gives us more time,” Mr Dombrovskis, the European Commission’s executive vice-president in charge of economic and financial policy. “Our intention of course is to use this possibility,” he said, adding that the move would help ensure “that banks are financing the real economy”. Read more (€) FD (NL) Bloomberg

Barron's, Les Echos: Suspending dividends as a global solution

The European Central Bank has asked banks to suspend dividend payments through October to preserve lending capacity during the coronavirus crisis, a call that comes about two weeks after a group of eight big U.S. banks suspended their own stock buybacks to conserve capital, says Barron's. An article by Les Echos states that recent moves by large companies are shedding new light on the relationship between shareholders and listed companies. Read more Les Echos

L'Economia: Insights on European cooperation, Interview with David Sassoli

The European institutions have already mobilized all the tools at its disposal - the suspension of the Stability Pact, the release of state aid, access to unused funds, the unlimited purchase of government bonds by the Bank, the new credit lines in the balance sheet. But behind the scenes the negotiations between member states are tough. In an interview with Europea Parliament president David Sassoli it is shown how policy makers deal with vetoes and challenges. "There are many reforms that the Union would need and we were preparing for a conference on the future of Europe to adjust some mechanisms such as the right of veto. Today we play the future on the sense of responsibility and usefulness for citizens. I believe that the depth of the crisis will convince the most reticent and those who up to now have thought they could do it alone." Read more (IT)

EBF IN THE NEWS

EBF acknowledges ECB recommendation on dividend distributions

The European Banking Federation takes note of the European Central Bank’s recommendation on banks dividend distributions: banks should not pay dividends for the financial years 2019 and 2020 until at least 1 October 2020, in order to allow a total of 30 billion euro of additional capital of the highest quality to be kept within the system. “Under these difficult circumstances, banks, more than ever, stand with their customers. Exceptional times call for exceptional measures. We hope that the economic conditions will have normalized by October. By then European banks boards should be able to re-assess their dividend and share buy-back strategy”, says Jean-Pierre Mustier, President of the EBF. Read more

EBF MEMBERS IN THE NEWS (Covid-19)

Ireland: Standing with the country

Across the retail banks in Ireland, almost 30,000 people are working – day in, day out – to respond as quickly as they can to this crisis. The Banking & Payments Federation Ireland wants to thank them for everything they are doing to support our customers and support the economy. Read more

Germany: BdB considers ECB decision a justifiable exception

The ECB has called on European banks not to pay a dividend for 2020 and - if not yet done - for 2019. Banks should thus build up additional reserves. The Association of German Banks (BdB) considers this measure to be justifiable in the current crisis situation. "Banks must stand by their customers in this extraordinary crisis", said Christian Ossig, Chief Executive Officer of the Association of German Banks. "This also includes that the institutions handle their capital reserves responsibly." Read more (DE)

Switzerland: SBA starts with Podcast: "Voices of the Financial Center"

The Swiss Bankers Association (SBA) launched its new audio format, the podcast "Voices of the Financial Centre". Relevant topics will be discussed with key players in the Swiss financial centre. The first episode deals with the topic of coronavirus and the role of the banks in the current situation. Marie Zeh, Social Media & Communications Manager at the SBA, moderates the podcast. Read more (DE)

UK Finance responds to NCA warning on Covid-19 related scams

Responding to the joint warning from the National Crime Agency, Home Office and City of London Police that criminals are exploiting the Covid-19 pandemic to commit fraud, UK Finance Managing Director of Economic Crime Katy Worobec said: “The banking and finance industry is taking action on all fronts to protect its customers from fraud and scams. We would urge the public to be vigilant against criminals using the publicity around Coronavirus as a chance to target their victims with fraudulent emails, phone calls, text messages or social media posts. Read more

FROM THE INSTITUTIONS

ECB asks banks not to pay dividends until at least October 2020

The European Central Bank (ECB) updated its recommendation to banks on dividend distributions. To boost banks’ capacity to absorb losses and support lending to households, small businesses and corporates during the coronavirus (COVID-19) pandemic, they should not pay dividends for the financial years 2019 and 2020 until at least 1 October 2020. Banks should also refrain from share buy-backs aimed at remunerating shareholders. Read more

ESMA: Covid-19: Guidance on financial reporting deadlines

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has issued a Public Statement on the implications of the COVID-19 pandemic on the deadlines for publishing financial reports which apply to listed issuers under the Transparency Directive. Read more

BIS: Covid-19: Deferral of Basel III implementation

The Basel Committee's oversight body, the Group of Central Bank Governors and Heads of Supervision (GHOS), has endorsed a set of measures to provide additional operational capacity for banks and supervisors to respond to the immediate financial stability priorities resulting from the impact of the coronavirus disease (Covid-19) on the global banking system. Read more

OECD updates G20 summit on outlook for global economy

The OECD’s Secretary-General, Angel Gurria, has updated the G20 leaders on the outlook of the global economy. The OECD found that the lockdown will directly affect sectors amounting to up to one third of GDP in the major economies. Read more

WTO: Covid-19: Unprecedented level of international cooperation

The OECD’s Secretary-General, Angel Gurria, has updated the G20 leaders on the outlook of the global economy. The OECD found that the lockdown will directly affect sectors amounting to up to one third of GDP in the major economies. For each month of containment, there will be a loss of 2 percentage points in annual GDP growth. Read more

Parliament: Covid-19: Approves crucial EU support measures

As part of the EU’s joint response to the COVID-19 outbreak, MEPs almost unanimously adopted three urgent proposals in an extraordinary plenary session, on Thursday. The urgent measures to help people and businesses tackle the crisis were voted on in plenary less than two weeks after the Commission tabled its proposals. Read more

European Commission calendar for this week

Find out more about the Commission's engagement and activities for the upcoming week. Read more

European Central Bank weekly schedule

Find out more about the ECB's engagements and activities for the upcoming week. Read more

European Parliament agenda

Find out more about the Parliament's engagements and activities for the upcoming week. Read more

ABOUT THE EUROPEAN BANKING FEDERATION

The European Banking Federation is the voice of the European banking sector, bringing together national banking associations. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.