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FMA supports ECB recommendation to refrain from distributions until 30 September 2021 and to urge utmost caution.

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The Austrian Financial Market Authority (FMA) supports the urgent recommendation issued by the European Central Bank (ECB) as well as the decision-making body of European banking supervision (SSM) to all banks to refrain as far as possible from making dividend distributions and from share buybacks, as well as to exercise utmost caution in paying out of bonuses and other variable salary components. Where dividend distributions or share buy-back programmes are intended despite this recommendation, they may only occur based on forward-looking internal capital planning and taking into consideration the impact of COVID-19 on the capital situation in consultation with the supervisor. In so doing the amount should not exceed 15% of cumulated net profits for the 2019 and 2020 financial years, or 20 basis points of the CET-1 ratio. “The massive challenges that Austrian banks face in the light of the ongoing COVID-19 crisis, and its massive economic impact, make it necessary for everything to be done in order to conserve and further strengthen their capital power and base,” the FMA’s Executive Directors Helmut Ettl and Eduard Müller remarked: “Once public aid and support programmes come to an end, the severe impact of the pandemic on the real economy will also be realised by credit institutions in terms of the backlog of insolvencies that will be observed. It is therefore necessary to be suitably prepared for this, in order to also be able to support the real economy during the upturn.”

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