WTF, BOE asks banks to suspend dividends!!!

[DiggerUK]

The Bank of England has persuaded major banks to hold on to proposed dividend payments and maintain as cash reserves.
I cannot recall this happening before, isn't the BOE supposed to be there as the 'lender of last resort'
 If banks are going to need higher cash reserves, will this not also be the case with businesses. 
Are we now to expect the same message from government to be made for businesses to suspend dividend payments.

https://www.bbc.co.uk/news/business-52114410

This is also now the position of the ECB.

https://finanz.dk/ecb-may-force-banks-to-delay-dividends-if-they-dont-comply-video/

The ramifications of this are potentially enormous for anybody relying on dividend income, or for reinvestment in portfolios..._

 

Edited April 1, 2020 by DiggerUK

[Si1]

Will they suspend bonuses aswell?

[DiggerUK]

3 minutes ago, Si1 said:

Will they suspend bonuses as well?

They have been requested to do so, at this moment the banks haven't responded......quelle surprise..._

[regprentice]

5 minutes ago, Si1 said:

Will they suspend bonuses aswell?

They've been asked to suspend bonuses for 'senior staff and traders'. Not that many people get bonuses nowadays. 

[Si1]

Lessons learned from Gordon Brown bailing out the bankers

[winkie]

1 hour ago, DiggerUK said:

They have been requested to do so, at this moment the banks haven't responded......quelle surprise..._

speaks volumes.

[Bluestone59]

1 hour ago, DiggerUK said:

The Bank of England has persuaded major banks to hold on to proposed dividend payments and maintain as cash reserves.
I cannot recall this happening before, isn't the BOE supposed to be there as the 'lender of last resort'
 If banks are going to need higher cash reserves, will this not also be the case with businesses. 
Are we now to expect the same message from government to be made for businesses to suspend dividend payments.

https://www.bbc.co.uk/news/business-52114410

This is also now the position of the ECB.

https://finanz.dk/ecb-may-force-banks-to-delay-dividends-if-they-dont-comply-video/

The ramifications of this are potentially enormous for anybody relying on dividend income, or for reinvestment in portfolios..._

 

Yes they are but how could it be right for the banks to pay divis as if all were normal and then have to go to the B of E for a sub because they've made too many bad loans.

Dividends have inevitably an element of risk, despite Motley Fool and others saying pile into this and get 4.7% as you can be sure the Divi will be maintained.

[Bluestone59]

I saw this reported earlier today as an event which had taken place not an unresolved request.  Or was that just journalism?

[regprentice]

2 minutes ago, Bluestone59 said:

I saw this reported earlier today as an event which had taken place not an unresolved request.  Or was that just journalism?

The dividends is happening for the banks noted below, the bonuses is just a request. 

In a series of coordinated statements the UK’s largest lenders – including Barclays, HSBC, Lloyds, Royal Bank of Scotland and Standard Chartered confirmed on Tuesday that they would temporarily halt shareholder payouts and share buybacks for 2019 and throughout 2020 following discussions with the Bank.

[Bluestone59]

3 minutes ago, regprentice said:

The dividends is happening for the banks noted below, the bonuses is just a request. 

In a series of coordinated statements the UK’s largest lenders – including Barclays, HSBC, Lloyds, Royal Bank of Scotland and Standard Chartered confirmed on Tuesday that they would temporarily halt shareholder payouts and share buybacks for 2019 and throughout 2020 following discussions with the Bank.

Yes, thank you I realised that just after I posted.

Logically, shouldn't the divis be paid first as the shareholders own the bank?

[Si1]

16 minutes ago, Bluestone59 said:

Yes they are but how could it be right for the banks to pay divis as if all were normal and then have to go to the B of E for a sub because they've made too many bad loans.

Dividends have inevitably an element of risk, despite Motley Fool and others saying pile into this and get 4.7% as you can be sure the Divi will be maintained.

Yes

[reddog]

This is absolutely shocking, it has massive implications for the future, the government/BoE can now micro manage firms to the point where they can't pay dividends.

 

It starts with banks as they are an easy target, but I'm sure this could come to other industries.

 

Begs the question, what is the point of owning shares?

 

Also, this has happened under a so called conservative government, looks like Boris is Jeremy Corbyn in disguise at the moment!

Edited April 1, 2020 by reddog

[Si1]

6 minutes ago, reddog said:

This is absolutely shocking, it has massive implications for the future, the government/BoE can now micro manage firms to the point where they can't pay dividends.

 

It starts with banks as they are an easy target, but I'm sure this could come to other industries.

 

Begs the question, what is the point of owning shares?

 

Also, this has happened under a so called conservative government, looks like Boris is Jeremy Corbyn in disguise at the moment!

In the case of the banks it's because we know they are going to have to be bailed out.

This is just so the lights stay on, not so they can make profits.

Much of the economy is going to be nationalised, necessarily, imho, over the coming months.

A responsible government would re privatised it after the dust settles. In the case of the railways I would hope they make a better job of it than first time around.

Edited April 1, 2020 by Si1

[Roman Roady]

2 hours ago, Si1 said:

Lessons learned from Gordon Brown bailing out the bankers

The only lessons learnt from that debacle was that the Banks can do what they like in a consequence free environment.

 

All else is just lessons...nothing learned.

Edited April 1, 2020 by Roman Roady

[Roman Roady]

30 minutes ago, reddog said:

Begs the question, what is the point of owning shares?

That, Detective, is the right question.

[dances with sheeple]

 

[nothernsoul]

This isnt jeremy corbyn style state socialism with an ideological motivation, or a motivation to conscious ly alter the balance of power between capital and labour. It is a purely pragmatic move, with the intention of preserving the status quo and the power of the elite as far as possible. Their banker mates may be unhappy being bullied into forgoing dividends and lending money to companies that might go bump, but it is a cost worth paying. The alternative they fear, is the whole debt pile coming crashing down and the public turning on them. 

[MarkG]

8 hours ago, Si1 said:

A responsible government would re privatised it after the dust settles. In the case of the railways I would hope they make a better job of it than first time around.

This time, Britain won't be in the EU, so it won't be forced by EU rules to privatize the railways in such a retarded fashion.

[Si1]

4 minutes ago, MarkG said:

This time, Britain won't be in the EU, so it won't be forced by EU rules to privatize the railways in such a retarded fashion.

Indeed

[regprentice]

HSBC reportedly under pressure to move their HQ from London to HK after the UK govt 'siezed' Asian investors dividends. 

For the regulators at the Bank of England to put a gun to the head of the board of directors is terrible,” said one director. “This should be a decision for the board to take. We should not be in the UK. The calls for redomiciling will increase

[Longtermrenter]

8 hours ago, nothernsoul said:

This isnt jeremy corbyn style state socialism with an ideological motivation, or a motivation to conscious ly alter the balance of power between capital and labour. It is a purely pragmatic move, with the intention of preserving the status quo and the power of the elite as far as possible. Their banker mates may be unhappy being bullied into forgoing dividends and lending money to companies that might go bump, but it is a cost worth paying. The alternative they fear, is the whole debt pile coming crashing down and the public turning on them. 

Thanks - I think you have summed up what I have been thinking.

[winkie]

16 hours ago, reddog said:

This is absolutely shocking, it has massive implications for the future, the government/BoE can now micro manage firms to the point where they can't pay dividends.

 

It starts with banks as they are an easy target, but I'm sure this could come to other industries.

 

Begs the question, what is the point of owning shares?

 

Also, this has happened under a so called conservative government, looks like Boris is Jeremy Corbyn in disguise at the moment!

You could say though that many shares should not be the price they are now.....manipulated on the way up, manipulation on the way down....?

[Ah-so]

9 hours ago, MarkG said:

This time, Britain won't be in the EU, so it won't be forced by EU rules to privatize the railways in such a retarded fashion.

Forced? We didn't privatise the railways due to EU rules. SNCF is still state-owned along with lots of other European countries. 

[scottbeard]

18 hours ago, Bluestone59 said:

Logically, shouldn't the divis be paid first as the shareholders own the bank?

Not really - most businesses pay their employees first, with the business owner keeping profit that remains.

17 hours ago, reddog said:

Begs the question, what is the point of owning shares?

Since this is the first EVER time that the government has asked this, and we are essentially in a wartime situation, the point of owning shares is that MOST years you get a dividend...

[Ah-so]

1 hour ago, regprentice said:

HSBC reportedly under pressure to move their HQ from London to HK after the UK govt 'siezed' Asian investors dividends. 

For the regulators at the Bank of England to put a gun to the head of the board of directors is terrible,” said one director. “This should be a decision for the board to take. We should not be in the UK. The calls for redomiciling will increase

HSBC directors and shareholders know that there are very good reasons not to be legally domiciled in a jurisdiction ultimately run by the CCP.