Credit Agricole Cancels 2019 Dividend

   By Pietro Lombardi 
 

Credit Agricole SA has decided to cancel the 2019 dividend following a recommendation from the European Central Bank.

France's second-largest listed bank by assets will propose to shareholders meeting on May 13 to allocate the full net profit for last year to reserves, it said late Wednesday.

The French bank's decision follows similar steps taken by other European peers, including France's Societe Generale SA, after the ECB asked the region's banks not to pay dividends or buy back shares during the coronavirus pandemic.

The ECB wants banks to boost their ability to absorb losses and support the economy as the eurozone braces for a sharp economic slowdown caused by the pandemic. For this reason, it asked banks not to pay dividends for 2019 and 2020 at least until Oct. 1, adding that lenders should also avoid buybacks.

The October deadline is incompatible with French laws, under which dividends have to be paid by the end of September, Credit Agricole said.

The bank will lay out new guidelines for shareholders' returns in the second part of the year. These can include an interim or exceptional dividend.

Cancelling the dividend for last year will boost Credit Agricole SA core capital ratio by 60 basis points, it said.

Write to Pietro Lombardi at [e-mail]

(END) Dow Jones Newswires

April 02, 2020 01:37 ET (05:37 GMT)

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