SINGAPORE (Apr 3): The deputy governor of the Bank of England, Sam Woods, has written to some banking bosses, asking them to suspend dividend payments, according to the BBC. He asked them to confirm their decision by March 31. Hence, the likes of HSBC Holdings and Standard Chartered – which are also listed on the Hong Kong Exchange – have announced the suspension of dividends and share buybacks.

In a statement, the Prudential Regulation Authority, which is part of the Bank of England, said: “Although the decisions taken [on March 31] will result in shareholders not receiving dividends, they are a sensible precautionary step given the unique role that banks need to play in supporting the wider economy through a period of economic disruption.” HSBC, Royal Bank of Scotland Group, Standard Chartered, Barclays and Lloyds Banking Group axed their outstanding FY2019 dividends and said there would be no payments in 2020. The British banks also agreed to suspend share buybacks. The logic of the deferral or cancellation is to preserve capital to save the economy.

Between them, Lloyds, Royal Bank of Scotland, Barclays, HSBC and Standard Chartered were expected to pay a total of £15.6 billion ($27.5 billion) to shareholders, according to analysts.

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