South Africa is urging its banks to withhold ordinary dividends and executive bonuses for 2020 to preserve capital as the economic fallout from the coronavirus pandemic remains uncertain. “The principle is: Keep as much ammunition in the armory as you possibly can,” Kuben Naidoo, chief executive officer of South Africa’s Prudential Authority and deputy governor of its central bank, said on a conference call hosted by Standard Bank Group Ltd’s SBG Securities. “We don’t know how long this crisis is going to last.” The regulator was commenting on guidelines released late Monday on how lenders should handle shareholder payouts and executive compensation. The guidelines, an update to a previous note published on March 26, are not instructions, and banks will be able to decide for themselves on what route to take, he said. Dividends already declared and investor payouts that lenders are legally obliged to make should still be paid, Naidoo said.
SOURCE: BUSINESS TECH
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