Featured Product

    SARB Issues Guidance on Dividend Distributions and Bonus Payments

    February 18, 2021

    SARB published the guidance note (3/2021) on the distribution of dividends on ordinary shares and payment of cash bonuses to executive officers and material risk-takers, in light of the pandemic and the temporary regulatory capital relief provided by the Prudential Authority. The guidance note outlines the need for banks to act prudently when considering making the said distributions in 2021. This guidance note replaces the guidance note 4 from 2020 and is relevant for all banks, branches of foreign institutions, controlling companies, eligible institutions, and auditors of banks or controlling companies.

    The note specifies that benefits of the regulatory relief measures provided by the Prudential Authority in 2020 should not be utilized for the distribution of dividends and payment of bonuses. on dividends and bonus payments in response to COVID-19. SARB considers it critical that banks continue to fulfil the fundamental role of providing the required funding, among other things, to households and businesses amid the pandemic. Thus, it is essential that banks continue to appropriately conserve capital to retain their capacity to support the real economy in an environment of heightened uncertainty that continues to be caused by COVID-19 pandemic. The Prudential Authority expects banks to take into consideration the adequacy of their current and projected capital and profitability levels, internal capital targets, risk appetite, and current and potential future risks of the global pandemic when making distributions of dividends on ordinary shares and payments of cash bonuses to executive officers and material risk-takers in 2021. The responsibility for approving the distribution of dividends on ordinary shares and the payments of cash bonuses to executive officers and material risk-takers ultimately rests with the board of directors of a bank. In those instances where bank boards of directors do approve the distributions of dividends on ordinary shares and/or payments of cash bonuses to executive officers and material risk-takers in 2021, payout ratios should be prudent and commensurate with the assessment of the current conditions and potential future uncertainty.

     

    Related Links

    Keywords: Middle East and Africa, South Africa, Banking, Dividend Distribution, COVID-19, Remuneration, Regulatory Capital, SARB

    Featured Experts
    Related Articles
    News

    US Regulators Release Stress Test Scenarios for Banks

    The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).

    February 28, 2024 WebPage Regulatory News
    News

    Asian Governments Aim for Interoperability in AI Governance Frameworks

    The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.

    February 28, 2024 WebPage Regulatory News
    News

    EBA Proposes Operational Risk Standards Under Final Basel III Package

    The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.

    February 26, 2024 WebPage Regulatory News
    News

    EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS

    The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.

    February 23, 2024 WebPage Regulatory News
    News

    ECB to Expand Climate Change Work in 2024-2025

    Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.

    February 23, 2024 WebPage Regulatory News
    News

    BIS Bulletin Examines Cognitive Limits of Large Language Models

    The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.

    January 25, 2024 WebPage Regulatory News
    News

    ECB is Conducting First Cyber Risk Stress Test for Banks

    As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.

    January 24, 2024 WebPage Regulatory News
    News

    EBA Continues Momentum Toward Strengthening Prudential Rules for Banks

    A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.

    January 24, 2024 WebPage Regulatory News
    News

    EU and UK Agencies Issue Updates on Final Basel III Rules

    The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards

    December 19, 2023 WebPage Regulatory News
    News

    Industry Agency Expects Considerable Uptake for Swiss Climate Scores

    The Swiss Federal Council recently decided to further develop the Swiss Climate Scores, which it had first launched in June 2022.

    December 18, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8952