(Bloomberg) --
Commerzbank AG (DE:CBKG) became the latest European bank to bow to pressure from regulators and scrap a dividend.
The German lender said it will not propose a dividend for 2019 at this year’s annual general meeting, according to a statement on Monday. “For the current fiscal year 2020, the management board will not plan for a dividend payment until the uncertainties of COVID 19 have ended.”
The German lender had stuck with its dividend proposal of 0.15 euros ($0.17) per share over the weekend even after the European Central Bank on Friday asked banks to delay payouts until at least October as the pandemic wreaks havoc on markets. Andrea Enria, the central bank’s top supervisor, said it would be socially irresponsible to continue paying dividends “in these exceptional times.”
The German government on Monday added its voice to the chorus of opponents, saying companies tapping state aid should suspend payouts to investors.
Banks have received unprecedented relief this month after the ECB temporarily allowed them to tap capital buffers and gave them more time to tackle soured loans. However, few lenders initially agreed to increase reserves by delaying or suspending payouts after the central bank issued a less strongly worded statement just calling on them to be “prudent” when deciding dividends.
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