Shareholder payouts at risk as ECB tells banks to hold capital - sources


Supervisors say banks too optimistic


Risk models struggle to capture inflation surge


ECB approved large payouts this year

By Francesco Canepa and Valentina Za

FRANKFURT, Nov 9 (Reuters) - Investors hoping for fat payouts from euro zone banks may be disappointed as supervisors are urging them to preserve capital in the face of a souring economic outlook, sources told Reuters.

Banks including UniCredit CRDI.MI and Societe Generale SOGN.PA have been reporting bumper profits and announcing dividends and share buybacks, boosted by a sharp increase in interest rates and a trading boom after more than a decade of mostly meagre returns.

But with the euro zone now heading for recession and supervisors urging caution, bankers will likely find it harder to reward shareholders as generously next year, as their capital buffers may be smaller than they expect now, the three supervisory sources said.

The European Central Bank (ECB), which supervises euro zone banks, believes some lenders have overly optimistic assumptions about the economy, based on models that cannot fully capture the damage from the current bout of inflation, the sources say.

A spokesperson for the ECB declined to comment.

Morgan Stanley estimates euro zone banks will pay out 40 billion euros ($40 billion) in 2022 dividends plus an additional 60 billion euros in share buybacks between this year and next - an outsized return by recent standards.

But the prospects for future payouts are already dimming.

Italy's Intesa Sanpaolo ISP.MI has deferred until at least early next year half of a 3.4 billion euro buyback the ECB approved in June as it waits to see how severe Italy's economic contraction will be.

"It's not a good idea to pay out capital during a recession," Intesa's Chief Executive Carlo Messina told analysts last week.

And Sweden's central bank told lenders in the country on Wednesday "to be restrictive with regard to large dividend payments and share buybacks".

This year, the ECB has given the green light to all buybacks that were put up for approval, including from UniCredit, Societe Generale and ING INGA.AS , one of the sources said.

This provided welcome relief to shareholders who were still hurting from a de-facto payout ban at the height of the COVID-19 pandemic in 2020.

But some bankers feel the ECB's approval process for buybacks is too onerous, industry sources said, adding to their frustration at the ECB's decision to shelve subsidised loans and perceived intrusiveness in operational decisions.

But the ECB's top supervisor, Andrea Enria, has also been telling banks to be prudent going forward and factor in the risk of a recession when they plan for future payouts.

"There is a worrying dissonance between these positive expectations and the unique combination of risks we are currently facing," Enria, who chairs the ECB's supervisory board, said this week.

Bankers have been fighting back, comforted by capital buffers that are far bigger than at the time of the financial crisis and from an expected increase in income from rising interest rates.

After setting a hard figure for shareholder remuneration under a plan to 2024 in defiance of an ECB preference for payout ratios, UniCredit's CEO Andrea Orcel even pledged to match this year's 3.75 billion euro distribution goal next year.

And Deutsche Bank's Chief Financial Officer James von Moltke said on Wednesday the ECB and other institutions "should be moving to championing the banks to help the economy rather than not."

But some analysts reckon economic reality, regardless of any demand by the supervisors, may well change bankers' minds.

"With the economy entering recession, the time of massive bank payouts is over," Marco Troiano, a managing director at Scope Ratings, said. "Running down capital cushions would weaken banks."

($1 = 0.9945 euros)

European banks' payouts rebound post-pandemic Link
Capital buffers at euro zone banks Link

Editing by Mark Potter

免責聲明: XM Group提供線上交易平台的登入和執行服務,允許個人查看和/或使用網站所提供的內容,但不進行任何更改或擴展其服務和訪問權限,並受以下條款與條例約束:(i)條款與條例;(ii)風險提示;(iii)完全免責聲明。網站內部所提供的所有資訊,僅限於一般資訊用途。請注意,我們所有的線上交易平台內容並不構成,也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。


本網站的所有XM和第三方所提供的内容,包括意見、新聞、研究、分析、價格其他資訊和第三方網站鏈接,皆爲‘按原狀’,並作爲一般市場評論所提供,而非投資建議。請理解和接受,所有被歸類為投資研究範圍的相關内容,並非爲了促進投資研究獨立性,而根據法律要求所編寫,而是被視爲符合營銷傳播相關法律與法規所編寫的内容。請確保您已詳讀並完全理解我們的非獨立投資研究提示和風險提示資訊,相關詳情請點擊 這裡查看。

我們運用 cookies 提供您最佳之網頁使用經驗。更改您的cookie 設定跟詳情。