Bank of Ghana orders banks not to declare or pay dividends to shareholders due to COVID-19

The Bank of Ghana (BoG) has directed all banks and Specialized Deposit Institutions (SDIs) in the country to stop declaring and paying dividends or distributing reserves to shareholders until further notice.

Bank of Ghana Governor, Ernest Addison

This means that the shareholders will not receive dividend from banks and SDIs for the 2019/2020 financial year due to the COVID-19 pandemic.

A press statement signed by the BoG’s secretary, Sandra Thompson said the banks and SDIs should not make any irrevocable commitments regarding the declaration or payment of dividends to shareholders, until further notice.

The Central Bank said this is to ensure that banks and SDIs are better able to support their customers throughout the COVID-19 pandemic period.

It added that the aim is “to absorb any potential operational losses for banks and SDIs from the COVID-19 pandemic.”

“For the avoidance of doubt, shareholders in this context means holders of Common Equity Shares (CET1) and Additional Tier I (AT1) capital instruments of banks and SDIs.”

The regulator of Ghana’s financial sector said it will grant an exemption on condition that such institutions have satisfied and met the regular prudential requirements and are not depending on the additional liquidity released by the regulatory reliefs provided by the BoG.

The statement said the BoG will continue to monitor the impact of the COVID-19 on banks, SDIs, and their customers so they can advise accordingly.

This is one of the many decisions the BoG has taken in the wake of the COVID-19 pandemic to protect banks and their clients as well.

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