Banking Dividend Freeze

[monabri]

I've already complained ( marked "complaint" ....they have to address complaints).

https://www.bankofengland.co.uk/contact

[digitaria]

More specifically

https://www.bankofengland.co.uk/contact/complaints-against-the-regulators

There is a pdf form to complete. Presumably you have to print it out, complete it, scan it and email it back. Could it be that they're trying to make it difficult?

I suggest that all those impacted should make the effort. I also intend to complain bitterly to my (Conservative) MP. At a time when the Government is trying to ensure the continued income of those in employment, the PRA is actively ensuring a reduction in income for a large number of investors, retirees and pensioners.

[monabri]

More specifically

https://www.bankofengland.co.uk/contact/complaints-against-the-regulators

There is a pdf form to complete. Presumably you have to print it out, complete it, scan it and email it back. Could it be that they're trying to make it difficult?

I suggest that all those impacted should make the effort. I also intend to complain bitterly to my (Conservative) MP. At a time when the Government is trying to ensure the continued income of those in employment, the PRA is actively ensuring a reduction in income for a large number of investors, retirees and pensioners.

Emailed my Conservative MP.

[Dod101]

I have emailed the HSBC Chairman and will send a letter to Sam Woods later today and the complaints one about the PRA. In my letter to the HSBC Chairman I have asked him to tell me why he thinks anyone anywhere would invest in the shares of a UK bank.

The HSBC announcement which does not of course say 'We have been bullied by the PRA to say this' can be found below

https://www.hsbc.com/media/media-releas ... -dividends

Dod

[monabri]

BBC's take on it
https://www.bbc.co.uk/news/amp/business-52114410

"But they will now retain those funds and not pay out any money to shareholders until at least the end of the year, which the Bank of England said "should help the banks support the economy through 2020".

However, the Bank said it did not expect the cash to be needed, noting that the banks had more than enough money in reserve to deal with both a global recession and a shock in the financial markets."

The banks are not going to dish out money to failing businesses... Sam!

Anyone think that the banks will ringfence the dividend and pay out at a later date?

[Dod101]

I don't think that they will be allowed to.

Dod

[onthemove]

I'll be peed off if they suspend the divi, but those that are cumulative will have to be paid eventually, which is more than canm be said for the divis on the ords.

Not strictly true re. ords.

Shareholders are entitled to the residual profits. If they scrap the ord dividend now, it means more money retained. That money still 'belongs' to the ordinary shareholders - it's still the residual profits, etc.

It's just that company is holding onto it for a little longer to act as a buffer. This means better chance of the company surviving and paying future dividends.

If withholding the dividend payments turns out not to have been necessary, it can be paid out at a later date.

I just hope this doesn't become a 'thing' that all companies feel the need to be seen to be doing now. It would be nice and reassuring to have at least some dividend payments from some companies during the remainder of the year.

Tesco and morrisons must be raking it in, but politically could even they be forced to scrap their dividend so as not to be seen profiting?

[ElectronicFur]

More here...

Banks are not likely to need the extra money that they save from scrapping dividends, the PRA said, but the extra headroom will allow them to support the economy this year.

https://www.standard.co.uk/news/uk/brit ... 03396.html

So in what way does letting the banks keep it but not use it help support the economy that distributing it to the shareholders so they can spend it buying things the economy produces doesn't.

Adrian

Basically what that statement is saying, is that the regulator knows banks don't really need the extra money, but politically they must be seen to act and punish the banks. They don't care about those who rely on the dividend payments, even if they're pensioners, they are all evil investors...

[richfool]

Suspending the banks dividends is going to adversely affect just about everyone's pension in the country. Hopefully the regulator has a large chunk of banks in his pension pot.

[88V8]

I think Bailey made it quite clear whilst at the FCA that he does not care a fig about retail investors.
And the Gubmt by appointing him has made it clear that they don't either.

However, a potential silver lining for those with some cash
viewtopic.php?f=6&t=22680&p=296416#p296416

V8

[monabri]

Suspending the banks dividends is going to adversely affect just about everyone's pension in the country. Hopefully the regulator has a large chunk of banks in his pension pot.

Final salary pension ?

[Wizard]

I think Bailey made it quite clear whilst at the FCA that he does not care a fig about retail investors.
And the Gubmt by appointing him has made it clear that they don't either.

However, a potential silver lining for those with some cash
viewtopic.php?f=6&t=22680&p=296416#p296416

V8

Spot on. I suspect some on here have not followed Bailey's career quite as closely as those with significant Pref holdings. ECNs anyone?

[OwenSwansea]

Andrew Bailey’s indifference to the interests of Pref. Share holders and the holders of Lloyds ECN’s whilst head of the FCA was a disgrace.
This man is not fit for high office.

Owen.

[argus]

Just checked the IR section on RBS, Lloyd's and Bank of Ireland, only RBS are explicitely stating the prefs will still be paid.

Announcements can be found here:

https://otp.tools.investis.com/clients/ ... id=1383493
https://www.lloydsbankinggroup.com/glob ... update.pdf
https://investorrelations.bankofireland ... -FINAL.pdf

A.

[OwenSwansea]

Perhaps Andrew Bailey is simply lazy and incompetent. Even Gina Miller was amazed at his appointment as head of the BoE, and for once I agree with her.

Owen.

[dealtn]

Seems sensible enough decision to me, and can't be unexpected. Guess I'm in the minority.

[FrankSeymour]

I have contacted Lloyds re LLPC, “Preference shares not impacted by the dividend suspension...”
And RBS concerning NWBD
“ ..RE RNS ... There is a specific sentence stating that there is no impact for preference share coupons...”

So it appears, just like during the financial crisis we will continue to be paid.

[pyad]

I'll be peed off if they suspend the divi, but those that are cumulative will have to be paid eventually, which is more than canm be said for the divis on the ords.

Not strictly true re. ords.

Shareholders are entitled to the residual profits. If they scrap the ord dividend now, it means more money retained. That money still 'belongs' to the ordinary shareholders - it's still the residual profits, etc.

It's just that company is holding onto it for a little longer to act as a buffer. This means better chance of the company surviving and paying future dividends.

If withholding the dividend payments turns out not to have been necessary, it can be paid out at a later date...

It is strictly true re ords.

Equity (ie. ord) divs are entirely discretionary because there is no contractual obligation for a company to pay any ord dividend at all. In contrast, prefs (ie. non equity) divs do have such a contractual obligation with normally a fixed percentage return, usually cumulative too. Equity shareholders are not therefore "entitled" to anything by way of div.

Furthermore and for the same reason, holding on to suspended ord divs does not require any back omitted payouts to be made up in future.

Seems that the bank div freeze is a political move from the authority rather than a necessary financial one to help out the banks but it is what it is and the reasons are probably not important. [expletive deleted] happens. In bad times divs get hammered, it's happened before to HYPs and will happen again.

Incidentally, nothing personal and this may not apply to you but why has the board been invaded by several non-HYPers? I've nothing against non-HYPers, reputedly they are human too, but why in the midst of the current problems have they decided to give us the non-benefit of their non-HYPing views which by definition are irrelevant here?

[Wizard]

Just checked the IR section on RBS, Lloyd's and Bank of Ireland, only RBS are explicitely stating the prefs will still be paid.

Announcements can be found here:

https://otp.tools.investis.com/clients/ ... id=1383493
https://www.lloydsbankinggroup.com/glob ... update.pdf
https://investorrelations.bankofireland ... -FINAL.pdf

A.

Because NWBD have to give extra shares if the dividend is not paid perhaps?
I think that is how it works and why it was not stopped before.

[dealtn]

Incidentally, nothing personal and this may not apply to you but why has the board been invaded by several non-HYPers? I've nothing against non-HYPers, reputedly they are human too, but why in the midst of the current problems have they decided to give us the non-benefit of their non-HYPing views which by definition are irrelevant here?

Perhaps because much of the chat here isn't HYP either and should be carried on over at the Banking Board, but few whether Hyp-ers, or not, seem to want to do so.