Swiss Banks Revise Dividend Plans
UBS and Credit Suisse are reining in their shareholder payouts. Both had been under pressure from Switzerland's regulator to preserve their capital for crisis times.
Switzerland's two big banks will stagger their 2019 dividends over two payments – with the second one subject to conditions. UBS and Credit Suisse are bowing to escalating pressure on stowing capital in view of the burgeoning crisis sparked by the coronavirus.
UBS was to pay $0.73 per share, but is instead proposing a $0.365 per share payout next month, and then a special dividend reserve in the same amount at year-end, it said in a statement on Thursday. Credit Suisse's proposal is similar: instead of the 0.2776 Swiss francs per share, it will pay 0.1388 francs per share now, half from profits and half out of the capital contribution reserves.
In fall, it will propose another 0.1388 franc per share payout. Both banks' second payouts are subject to market and economic conditions and require approval by a specially convened meeting of shareholders.
Economic Bazooka
The move was welcomed by the Swiss financial regulator, which had spent recent weeks stepping up its rhetoric: «Finma views this precautionary measure taken by both institutions as a way of simultaneously dealing with the major uncertainties associated with the COVID-19 crisis and addressing shareholders’ expectations,» it said in a statement.
«This fits into a united and internationally coordinated effort by all concerned to meet the challenges of the COVID-19 crisis» Finma said. European banks, less healthily capitalized than UBS and Credit Suisse, were quicker to rein in their payout plans as the crisis unfolded.
UBS, Credit Suisse, and other Swiss banks are at the forefront of $40 billion bazooka in economic stimulus measures unleashed by the Swiss government to cope with the crisis.
More to follow
