rtmark
LearnBonds.com

UK insurers and lenders cut dividends while US banks suspend share buybacks

Some of the UK biggest insurers Aviva, RSA, Direct Line and Hiscox have scrapped plans to pay £1.3bn of dividends to shareholders during the coronavirus crisis, bowing to pressure to conserve cash from the Bank of England.

The move follows the same move last week form the UK biggest banks – including Barclays, HSBC, Lloyds, Royal Bank of Scotland and Standard Chartered – to ditch plans to pay £7.5bn of shareholder payouts giving lenders an additional cushion to weather an economic downturn.

The Prudential Regulation Authority (PRA), part of the Bank, welcomed “the prudent decision” from insurers.

The PRA today said on Wednesday: “We welcome the prudent decision from some insurance companies today to pause dividends given the uncertainties associated with the global pandemic.”

It added: “Insurers should pay close attention to the need to protect policyholders and maintain safety and soundness.”

The Bank of England wrote to banks and insurers at the end of March asking them to suspend dividend payments and hold onto the cash which they may need during the crisis.

This year, a range of firms from Housebuilder Crest Nicholson to Exercise chain Gym Group has withheld dividends to conserve cash for a potential downturn following stalled economic activity due to the pandemic.

Russ Mould, AJ Bell Investment Director said: “That takes April’s total of cancelled, deferred or suspended dividend payments to £4bn across the UK market, and the aggregate income lost to shareholders this year to £19.3bn.

UK insurers and lenders...

The move contrasts with the measures adopted by major US banks such as JPMorgan, Bank of America, Citigroup who have suspended stock buybacks due to pandemic but have so far retained dividend payouts. America’s eight largest lenders have spent $69bn on buying back nearly 550 million shares since the first quarter of 2016.

In the UK, dividend income is critical for many of the retail and institutional shareholders. British money manager Legal & General decided to go ahead with its £750m dividend payment to shareholders, contrary to its regulator’s advice.

UK insurers and lenders...

Trusted & Regulated Stock & CFD Brokers

What we like

  • 0% Fees on Stocks
  • 5000+ Stocks, ETFs and other Markets
  • Accepts Paypal Deposits

Min Deposit

$200

Charge per Trade

Zero Commission

Rating

64 traders signed up today

Visit Now

75% of investors lose money when trading CFDs.

Available Assets

  • Total Number of Stocks & Shares5000+
  • US Stocks
  • German Stocks
  • UK Stocks
  • European
  • ETF Stocks
  • IPO
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 Zero Commission
  • NASDAQ Zero Commission
  • DAX Zero Commission
  • Facebook Zero Commission
  • Alphabet Zero Commission
  • Tesla Zero Commission
  • Apple Zero Commission
  • Microsoft Zero Commission

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account
  • Paypall
  • Skrill
  • Neteller

What we like

  • Sign up today and get $5 free
  • Fractals Available
  • Paypal Available

Min Deposit

$0

Charge per Trade

$1 to $9 PCM

Rating

Visit Now

Investing in financial markets carries risk, you have the potential to lose your total investment.

Available Assets

  • Total Number of Shares999
  • US Stocks
  • German Stocks
  • UK Stocks
  • European Stocks
  • EFTs
  • IPOs
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 $1 - $9 per month
  • NASDAQ $1 - $9 per month
  • DAX $1 - $9 per month
  • Facebook $1 - $9 per month
  • Alphabet $1 - $9 per month
  • Telsa $1 - $9 per month
  • Apple $1 - $9 per month
  • Microsoft $1 - $9 per month

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account
All trading carries risk. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
Galina Mikova

Galina is a Hubspot-certified Technical Writer with over 10 years of experience in working with Fortune 500, private investment, banking, FOREX and niche tech companies as well as crypto and blockchain startups. She has a solid background in FinTech and blockchain technology.