SBP advises banks to suspend dividend distribution for two quarters

ISLAMABAD: In view of uncertainty arising out of COVID-19 pandemic, the State Bank of Pakistan has advised all the banks and development financial institutions (DFIs) to suspend the dividend distribution for the next two quarters, ARY News reported.

In a statement, the SBP said that the banks/DFIs that have approved dividend declaration for the quarter ended March 2020 by 22nd April 2020 have been advised to suspend dividend distribution for June and September quarters 2020.

All other banks have been advised to suspend dividend distribution for March and June 2020 quarters. This measure will also enhance the loss absorption capacity of the banking system and will enable them to further support the real sector in Pakistan, read the statement.

SBP said, “We are confident that the suspension of dividend payout will further increase the resilience of the banking sector and improve their ability to provide much-needed credit support to the real economy.

SBP will keep on closely monitoring the performance of banks/DFIs under its regulatory domain and take appropriate action as needed to ensure the safety and soundness of individual banks/DFIs and the overall banking system, read the statement.