Share
Nedbank on future of dividends, executive bonuses
Nedbank has assured shareholders that they will be paid their final dividend of R6.95 per share later this month. But the bank warned future dividends will be impacted by guidelines from South Africa’s Reserve Bank that dividends and bonuses be put on ice while the country fights the coronavirus. Mike Brown, Nedbank CEO joins CNBC Africa for more.
Wed, 08 Apr 2020 16:02:26 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- Nedbank assures shareholders of honoring previously declared dividends but acknowledges future distributions may be impacted by SARB guidelines
- Executive bonuses and dividends for 2020 subject to SARB's call for no distributions in light of the COVID-19 crisis
- Nedbank actively supports small businesses through various initiatives and collaborates on relief measures with other financial institutions
Nedbank has assured its shareholders that they will receive their final dividend of R6.95 per share as previously declared. However, future dividends and executive bonuses may be impacted by guidelines issued by the South Africa Reserve Bank (SARB) in response to the ongoing COVID-19 pandemic. Mike Brown, the CEO of Nedbank, discussed the bank's adherence to the regulatory guidance and its commitment to supporting the economy during these challenging times in an interview with CNBC Africa. Brown emphasized the importance of preserving capital to help weather the economic storm and the unique role that banks play in providing financial stability. The SARB's guidance note prohibits distributions of dividends or cash bonuses for the year 2020, and Nedbank is expected to comply with these regulations. While already declared dividends for 2019 will be honored, all future distributions will be impacted until the guidance is revised. The bank also intends to align executive remuneration with the current economic conditions by considering the guidance seriously in its decision-making process. Brown highlighted that the bank's executive team had received no increases in the past year and that the overall incentive pool had decreased significantly. Nedbank remains focused on supporting small businesses through various initiatives, including loan extensions and payment holidays. The bank has received thousands of inquiries and applications for financial assistance and is actively working to process these requests. Additionally, Nedbank is collaborating with other institutions to explore further measures to aid businesses and consumers in need. The SARB, in partnership with the National Treasury, is working on a funding for lending scheme to provide additional relief to small and medium enterprises (SMEs). While the details of the scheme are still being finalized, the aim is to facilitate access to credit for businesses struggling during the crisis. The SARB's interventions, such as capital and liquidity support for banks and relaxed regulations on loan restructurings, are designed to enable financial institutions to continue lending and supporting the economy. Despite the recent credit rating downgrades by agencies like Fitch and Moody's, Nedbank remains prepared to navigate the challenging economic landscape. Brown acknowledged the uncertainty surrounding the COVID-19 pandemic and its impact on South Africa's economy, emphasizing the need for flexibility and preparedness for various scenarios, including the potential extension of lockdown measures. Nedbank is prioritizing financial resilience and a proactive approach to supporting its customers and the broader economy during these unprecedented times.
SIGN UP FOR OUR NEWSLETTER
DAILY UPDATE
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.