Banks left scrambling after SA Reserve Bank throws a curveball on dividends

The South African Reserve Bank’s Prudential Authority giving banks the go ahead on dividend payments as they put the finishing touches to their 2020 financial results, but some banks have already warned shareholders not to expect a pay-out. Intellidex chair Stuart Theobald is featured in Daily Maverick saying that bank boards always have to be prudent in deciding to pay dividends, but the SA Reserve Bank is clearly trying to use moral suasion to tell boards to be particularly cautious about the outlook. He also pointed out that SA’s credit environment has been better than some of the worst-case scenarios envisaged when the SARB decided to give banks access to the capital buffers that are built up in good times.

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