Norwegian banks must reconsider dividend plans, regulator says (updated)

Sparebank 1 Nord-Norge

16/03/2020 08:10

(Adds detail)
    OSLO, March 16 (Reuters) - Norwegian banks should reconsider
their dividend plans as well as share buyback schemes in light
of the economic uncertainty caused by the coronavirus outbreak,
the country's bank regulator (FSA) wrote in a letter on Monday.
    Most banks have already proposed significant payments for
2019, and are due to hold shareholder meetings in the coming
weeks to approve the plans.
    "In the time since boards made their proposals, the
assumptions on which they were based have completely changed ...
the chance of a serious economic setback internationally and in
Norway must be taken into account," the FSA wrote.
    "In this situation, it's important that banks are able to
absorb the significant losses that could arise from their
lending in the time ahead, while at the same time being able to
lend to credit-worthy clients," it added.
    The FSA said all banks were given a March 23 deadline to
outline its revised plans.
    The shares of DNB  DNB.OL , Norway's biggest bank, fell 5.9%
in early trade, slightly underperforming a 5% drop in Norway's
benchmark stock index  .OSEBX .
    DNB did not immediately respond to a request for comment.

 (Reporting by Terje Solsvik, editing by Gwladys Fouche)
 ((terje.solsvik@thomsonreuters.com; +47 918 666 70; Reuters
Messaging: terje.solsvik.thomsonreuters.com@reuters.net))