Swiss banks UBS and Credit Suisse will delay paying out a part of their last year’s dividends until later this year after mounting strain from authorities over lenders’ payouts during the coronavirus epidemic.
The step follows bank dividend cancellations or postponements across much of Europe as regulators have heaped stress on lenders to conserve profits and capital with a purpose to assist the economy.
The two banks had been the remaining major European financial institutions to resist requests to alter their dividend policy. However, they stopped in need of measures taken by British and eurozone banks who’ve either suspended or canceled all their 2019 payouts.
Switzerland’s two largest banks stated their strong capital and liquidity positions would have allowed them to support the Swiss financial system and their clients within the crisis while paying out their dividends; however, both had been bowing to requests from Swiss financial markets watchdog FINMA.
The regulator had warned banks not to pay out dividends as a way to preserve capital to lend to corporations throughout a financial downturn brought on by coronavirus restrictions. It toughened its stance final week by blocking upcoming dividend funds from capital aid measures.
Each Credit score Suisse and UBS are collaborating in a Swiss authorities emergency mortgage scheme to assist companies hit by the pandemic. UBS stated it had already supplied 2.1 billion Swiss francs ($2.2 billion) in liquidity to greater than 16,000 largely small- and medium-sized firms.