Below is comment from Positive Money on this afternoon’s announcement that the banking regulator, the Prudential Regulation Authority (PRA), will give lenders the green light to resume dividend payments, just 9 months after they were suspended to encourage banks to preserve capital for lending and support the recovery.

London, 10 December 2020 

Responding to news that the UK banking regulator will allow banks to resume payouts to shareholders and executives, Fran Boait, executive director of Positive Money, said: 

“It is deeply concerning that the Bank of England is pandering to commercial banks and allowing them to prioritise shareholder payouts instead of supporting the Covid-19 recovery.

“The Bank rightly suspended dividend payouts in March to make sure lenders were preserving capital to support struggling households and businesses across the economy. Private banks have been lobbying to overturn this intervention ever since, proving once again that they cannot be trusted to work in the public interest, even during a global pandemic. 

“The Bank is now also considering watering down its guidance on limiting executive bonuses. With considerable economic uncertainty and unemployment set to rise sharply, this would be premature and irresponsible.”

Notes

1. PRA statement, 10/12/20: https://www.bankofengland.co.uk/prudential-regulation/publication/2020/pra-statement-on-capital-distribution-by-large-uk-banks 
2. UK banks agree to scrap £8bn dividends amid recession fears, March 2020: https://www.theguardian.com/business/2020/mar/31/uk-banks-agree-to-scrap-dividends-and-bonuses-due-to-recession-fears 
3. Positive Money campaigns for a money and banking system which supports a fair, democratic and sustainable economy. Set up in the aftermath of the financial crisis, Positive Money is a not-for-profit company funded by charitable trusts and foundations, as well as small donations from its network of over 65,000 supporters. https://positivemoney.org/  
4. For more information or to arrange a briefing/interview with a spokesperson please contact press@positivemoney.org.uk