Belgian bank KBC will withdraw its final dividend for 2019 in light of the new coronavirus (Covid-19) crisis, the bank announced on Monday.
In line with ECB recommendations, KBC Group withdraws final dividend over 2019 profit and cancels proposed share buy-back . Please read press release https://t.co/ntUW3h7NMv pic.twitter.com/Jwxl3zPwLR
— KBC Group (@kbc_group) March 30, 2020
This decision is "fully in line with the European Central Bank recommendation," the bank said in the press release. The ECB called on banks last Friday to stop paying dividends so as to "boost banks’ capacity to absorb losses and support lending to households, small businesses and corporates during the coronavirus (COVID-19) pandemic."
KBC will "evaluate in October 2020 whether all or part of this withdrawn final dividend should as yet be paid out later this year (2020) in the form of an interim dividend."
"Banks should also refrain from share buy-backs aimed at remunerating shareholders," the ECB said, an advice KBC is following as well.
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The Belgian bank is also taking other measures in light of the coronavirus pandemic. KBC will hold its meeting of general shareholders digitally and postpone an "Investor Day" that was planned in Prague on 17 June.
"Today we find ourselves in unprecedented circumstances," said KBC Group CEO Johan Thijs. "The economic impact of the corona-pandemic on the economy is still very uncertain, but it is widely expected that the impact will be significantly negative. The cost of repairing the global economy will be very significant too."
"We believe that also financial institutions need to show solidarity and we want to take our responsibility in helping to solve this crisis," Thijs said.
Meanwhile, Dutch banks ING and Rabobank both announced that they would also follow the ECB's recommendations.
Jason Spinks
The Brussels Times
