HSBC, Standard Chartered dividend limits removed by Bank of England
- Prudential Regulation Authority discards ‘temporary guardrails’ put in place after banks resumed dividend payouts
- Regulator urges banks to exercise ‘appropriate degree of caution’ around distributions
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“In addition, although considerable uncertainty remains, the level of uncertainty has decreased significantly since December 2020, in particular due to the progress of vaccination programmes.”
HSBC and Standard Chartered are both based in London, but generate the bulk of their profit in Asia, with Hong Kong as their largest market.
That compared with 30 US cents a share paid out by HSBC on an interim basis in 2019 and 7 US cents a share by Standard Chartered before they suspended their final dividends last year.
The vaccination levels in the UK have prompted the government to ease social distancing restrictions, with a complete lifting of those restrictions expected later this month. Nearly 70 per cent of the UK population has received at least the first dose of the vaccine, compared with 38.6 per cent of the population in Hong Kong.
Shares of HSBC rose 2.6 per cent to close at HK$45.05 in Hong Kong on Tuesday, while Standard Chartered’s shares rose 2.5 per cent to close at HK$49.50.
HSBC did not immediately have a comment when contacted on Tuesday, while a Standard Chartered spokeswoman declined to comment.
In its announcement, the PRA said it remained essential for banks to continue to support households and businesses in the UK as its economy continues to recovery from a pandemic-induced slowdown and as the British government unwinds support measures.
“Bank boards should therefore continue to exercise an appropriate degree of caution around the level of any shareholder distributions,” the regulator said.