Central Bank Recommends Banks Should Not Distribute Dividends in 2020

Romania's central bank recommends commercial banks operating in Romania not to distribute dividends this year from their 2019 earnings, central bank board member Cristian Popa said Wednesday.

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“Let me emphasize this is a recommendation and not a requirement. It is in the banks' best interest to be sufficiently capitalized,” said Popa.

The European Central Bank on Friday recommended banks in the eurzone to postpone dividend payments and share buybacks until at least early October and use that money to curb losses and improve their lending capacity.

Earlier Wednesday, lender BRD's parent group, France's Societe Generale, has requested the lender allocate its RON1.5 billion profit to retained earnings. The bank had previously planned to distribute RON1.1 billion as dividends. Shareholders will make a decision at a meeting on April 23.

“The Romanian banking sector is well prepared to deal with this situation created by the spread of Covid-19 in Romania,” said Popa.

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