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In Piazza Affari, securities from the banking sector have returned to the center of attention, primarily due to the latest news on the risk front, with particular reference to the takeover bid launched by Credit Agricole on Creval, but there are also other dossiers that are being looked at , just think of Banca MPS and Banco BPM.
Dividends: banks awaiting the ECB’s verdict
Another hot topic, such as dividends, is also keeping the attention on banks high, waiting to see shortly what the ECB’s decision will be regarding their distribution.
As is known in recent months, following the outbreak of the coronavirus crisis, the Eurotower has ordered a ban on banks from remunerating their shareholders with coupon payments.
The ECB is expected to update after 10 December the decision on the ban on dividend distribution, which is effective until 1 January 2021.
Bank dividends: this is the orientation of the Eurotower according to Mersch
On this issue, the Financial Times reports some statements by the vice-president of the ECB supervisory board, Yves Mersch.
The latter made it known that the regulator will maintain a very conservative approach on restoring payouts to pre-crisis levels, which however will not imply the confirmation of a general ban.
The ECB’s decision, as explained by Mersch in an interview with the Financial Times, will largely depend “on the prudence of internal models in banks, prudence in provisions and a sound perspective of a bank’s capital trajectory. taken into account “.
In any case, the prevailing orientation is that there will not be a general rule for all credit institutions and the Vice-President of European Supervision himself has indicated that exceptions will be possible for individual banks.
Bank dividends: Equita, distribution ban until March. And then?
According to Equita SIM analysts, it is reasonable to expect an extension of the ban on distributing dividends until next March.
In early spring, there should be greater stability in the macro scenario, as a result of which experts expect a selective restoration of dividend policies to be authorized.
The most reasonable scenario, according to Equita SIM, is the one in which banks are authorized to pay dividends in 2021, largely to be used on the 2020 profit generation.
On the other hand, analysts seem very unlikely to distribute reserves both of profits, i.e. the amounts set aside in 2019, and of capital.
Intesa Sanpaolo and Mediobanca the most interesting in terms of dividends
For this reason Equita SIM believes that the most interesting banks from the point of view of restoring generous and sustainable dividend policies are those characterized by resilient profitability also in 2020.
This is the case of Intesa Sanpaolo for which analysts expect a dividend on the 2020 profit of € 0.14 per share, equal to a yield, i.e. a yield of 8%, with a payout of 68%.
Mediobanca is also interesting, which according to experts should pay a dividend of 0.54 euros with a yield of 7% and a payout of 70%.
Focus on Banca Mediolanum, Banca Generali and FinecoBank
For asset gatherers, i.e. asset management companies and bank-networks listed on Piazza Affari, the combination of negligible credit risk, due to the different nature of business compared to banks, and the solid capital position, make all companies of the sector suitable for restoring the dividend payment.
For Banca Mediolanum, the expected coupon for 2020 is € 0.4, with a yield of 5.4% and a payout of 8.3%, but the yield rises to 9.7% including the balance of the 2019 dividend of 0.34 euros.
For Banca Generali, against a payout of 73%, the dividend is 1.5 euros per share, with a yield of 5.4% which rises to 11%, also considering the balance of the 2019 coupon in this decrease.
FinecoBank’s dividend, equal to 0.33 euros, is less attractive, with a payout of 64% and a lower yield of 2.6%.
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