The Central Bank of Russia (BCR) today recommended banks and non-financial companies not to distribute dividends in 2022, despite having allowed financial institutions to breach capital requirements due to the impact of Western sanctions on the country’s economy.
“In view of the difficult economic situation, the Bank of Russia recommends refusing to pay dividends in 2022 to banks (…), as well as non-credit financial institutions,” he said in a statement, announcing new measures. to support the financial sector.
The Russian monetary entity recalled that credit institutions are allowed, under current conditions, to breach capital adequacy margins, that is, capital requirements, but in any case they must “limit the payment of dividends and bonuses to the management”.
Finance Minister Anton Siluanov recently noted that his department will propose abandoning the dividend policy by banks with regard to 2021 results, despite the fact that last year “was probably the most successful in recent times.” .
The largest state-owned banks, Sberbank and VTB planned before being placed on the Western sanctions list to distribute 50% of their 2021 net profits in dividends.
The heads of Sberbank and VTB, Herman Gref Andrei Kostin, respectively, sent a letter to the Russian Prime Minister, Mikhail Mishustin, in mid-March, in which they calculated the combined losses of the two largest banks at almost 600,000 million rubles (7,358 million of dollars).
The letter, according to the Interfax agency, also stressed that, according to the Bank of Russia, the losses of the banking system in 2022 will be up to 5.8 trillion rubles (71,381 million dollars).
