7th Apr 2020 13:29
(Alliance News) - Investec Ltd and Investec PLC on Tuesday acknowledged the guidance by South African regulators which called on lenders to halt dividend payments in 2020.
On Monday, the Prudential Authority, an arm of the South African Reserve Bank, advised lenders to hold off on payouts and executive bonuses.
The regulator said: "With the high probability that the impact of Covid-19 will result in heightened stress in the banking system, the PA is issuing a guidance note advising banks not to distribute discretionary ordinary dividends during this period. Similarly, bonuses for senior executives should also be put on hold during this period."
Investec said it will consider the Prudential Authority's advice.
"The group recognises the importance of dividends to the group's owners, the significant challenges currently faced by businesses and individuals and the need to support the wider economy amid the Covid-19 pandemic, as well as the importance of ensuring the stability of the group in the short, medium and long term," Investec added.
The company said it remains highly liquid and well capitalised.
Investec shares were trading 10% higher at 161.40 pence each in London, while in Johannesburg the stock was up 9.7% on Tuesday at ZAR38.02 a share.
Similar action has been advised by the European Central Bank and the Bank of England, leading to the cancellation of dividends by all the major London-listed banks and by European banks such as Banco Santander SA and BNP Paribas SA.
By Evelina Grecenko; [email protected]
Copyright 2020 Alliance News Limited. All Rights Reserved.
Related Shares:
Investec