The dividend rebellion of Finnish banks is expanding, but the Financial Supervisory Authority still has no reason to intervene.
Aktia announced on Tuesday that it would immediately pay a decent dividend for the second year, although the European Central Bank and the Finnish Financial Supervisory Authority have recommended that banks postpone their dividend payments until the autumn due to the interest rate crisis.
Previously Bank of Åland similarly said it would pay dividends in violation of the recommendations.
Deputy Director of Financial Supervision Jyri Helenius comments on Aktia’s announcement Pacific neutrally.
“The ideas are practically the same as for the Bank of Åland’s decision. The basic comment is the same, but now we have to speak in the plural: it is unfortunate in Fiva that Finnish banks are leaching from this European front. ”
Helenius says he has not heard similar announcements from other European banks.
As this is a recommendation and not a binding regulation, Fiva does not have the possibility to sanction Aktia and the Bank of Åland, for example, Helenius says.
Discussions are going on with the supervisees, Helenius says, but does not want to clarify.
The installment-free business is busy
The ECB’s dividend limits have been harshly criticized by the banking community and investors. President and CEO of Aktia Mikko Ayub commented earlier on Tuesday that the dividend cap is unfair to solvent banks.
Helenius says that all aspects have been taken into account in the preparation of the ECB recommendation and in the discussions between national supervisors.
“The preparation has taken into account the idea of whether the recommendation could be differentiated according to the situation of the bank, or how to affect the attractiveness to investors if the distribution of dividends is widely restricted.”
He recalls that the situation remains exceptionally uncertain due to the corona pandemic.
“Credit losses typically occur with a delay after an economic shock. We do not yet know how the disease situation and the economic impact will progress. ”
He goes on to say that the installment breaks available across Europe may hide credit risk.
The ECB directly controls the largest banks and smaller ones such as Aktia and the Bank of Åland are under the supervision of a national authority. The ECB’s recommendation was only a recommendation for Fiva, which was then discussed by the agency, Helenius says.
“We did not see sufficient grounds for treating banks supervised by Fiva differently from those supervised by the ECB.”
Fiva has never deviated from the ECB’s recommendations in supervisory matters, Helenius says.
Helenius did not want to comment on the fear of the dividend revolt spreading in Finland or more widely in Europe.
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