The European Central Bank has published an updated Recommendation requiring the largest Eurozone-based banks to suspend the payment of any dividends and buyback of shares until at least October 1, 2020. The Recommendation is addressed to significant institutions that are directly prudentially supervised by the ECB. Eurozone national regulators of smaller banks are expected to apply the Recommendation, as deemed appropriate. The Recommendation applies to both 2019 and 2020 dividends, but does not retroactively apply to dividends that have already been paid for the 2019 financial year. Where a bank believes that it is legally obliged to make a dividend pay-out, it should explain the reasons to its joint supervisory team.

The purpose of the Recommendation is to ensure that banks are able to maintain their lending and therefore the support of businesses during the current global pandemic.

View the ECB recommendation here.

View the ECB press release here.

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