OneSavings Bank pulls final dividend due to Covid-19

By Michele Maatouk

Date: Friday 03 Apr 2020

OneSavings Bank pulls final dividend due to Covid-19

(Sharecast News) - OneSavings Bank said on Friday that it was pulling its final dividend as it looks to weather the coronavirus pandemic.
The challenger bank decided to cancel the final 2019 dividend that was due to be paid on 13 May "in order to help us to serve the needs of businesses and households through the extraordinary challenges presented by coronavirus".

"The board will continue to assess the appropriateness of dividend payments and decide on any dividend policy and amounts at year-end 2020," it said.

OneSavings said it remains "highly" liquid and well-capitalised, and on a pro forma basis, excluding the final dividend for 2019, the common equity Tier 1 ratio would have been around 0.6% higher at 16.6% as at 31 December 2019.

Shore Capital said: "While sensibly prudent, we do not believe that this decision was taken for purely financial reasons, noting the balance sheet is well capitalised, with strong liquidity and good access to funding via both retail deposits and the Bank of England's updated Term Funding Scheme.

"This, we think, is as much a moral decision for the board at a time of unprecedented difficulty for the UK economy which is suffering significant disruption due to the restrictions on social movement in order to manage the impact of Covid-19.

"We do not believe the group has been directly requested to take this action by the PRA but we think a clear precedent was set when it instructed larger banks to withdraw dividends earlier in the week. Consequently, we think it is fair to assume that all other quoted banks and lenders (large or small) are unlikely to pay dividends for the remainder of calendar 2020 (although those with period ends which conclude after the end of the 2020 calendar year may still consider interim or final dividends at that point in time)."


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