It’s getting harder for Australian financial regulators to avoid joining their peers in New Zealand, the UK and EU in ordering banks to suspend their dividends and other capital management moves such as share buybacks.
Barclays, RBS, Lloyds, Standard Chartered, Santander and HSBC have all agreed to not proceed with dividends. Will Australian financial regulators follow their peers in the EU and UK and tell major banks to suspend dividends and planned buybacks?
Citi does not expect APRA to follow the RBNZ’s lead in suspending bank dividend payments, as too many self-funded retirees rely on that income with the cash rate at 0.25%. The regulator has indeed flagged an opposite capital approach — easing the timing on “unquestionably strong” levels in the face of the crisis.
Morgan Stanley believes Commonwealth Bank is priced for a strong result so the potential for disappointment is great. The outlook for margins and costs, alongside expectations of a buyback, will be the main focus.